The Wirecard scandal: What is it? And all the details you need to know 

The 1999 established payment processor and financial service provider company Wildcard offered customers electronic payment transactions and risk management services. They used to process and issue physical cards as well. 

The Wirecard Scandal blew up when in 2019 the Financial Times published a series of investigations and it was revealed that the fintech company was involved in corrupt business practices and fraudulent financial reporting. The investigation was backed up by leaked internal documents. 

Several questions were raised since Germany's top financial watchdog and auditor Ernst and Young failed to detect this early on. This was a great failure on the part of the Federal Financial Supervisory Authority (BaFin).

key things to know about the scandal:

Wirecard Scandal: The Origin 

• The digital payment company was founded in 1999 and had its headquarters in Munich.
• Wirecard initially processed online payments for porn and gambling websites. 
• This stable stream of revenues helped Wirecard to survive the dotcom crisis.
• When more websites like these rose so did Wirecard. 
• In 2002, with Braun in charge, the company grew at a speed and eventually expanded its services into banking and buying up smaller payment companies, in Asia.

Wirecard: The rise and the fall

• In 2018, Wirecard boomed as a rare German success story in the booming fintech sector after appearing in the DAX index.
• The company was valued at more than 24 billion euros ($25 billion), at the time which was even more than Deutsche Bank at the time.
• In 2019, the Financial Times released several articles alleging accounting irregularities in Wirecard's Asian units hence Wirecard's share price suffered.
• In 2020, the company admitted to auditor Ernst and Young in June that the 1.9 billion euros in cash meant to be held in two Philippine accounts likely didn't exist.
• Wirecard saw a dip in its share price by 99 percent and it became the first DAX company to go bust later only to be booted off the index.

The False Data 

• Wirecard inflated its earnings through unreal transactions which involved many subsidiaries and partner companies.
• They presented false financial results for 2015-2018 and included revenues from so-called third-party acquirers (TPAs) in Dubai, the Philippines, and Singapore which "did not actually exist". The address for these firms led to a family home in the Philippines and a Manila bus company.

FT journalist Dan McCrum said that's when he knew Wirecard was faking it. "None of it's real. It's just an incredible bluff," he said in a Netflix documentary.

The Aftermath of the Scandal

•  The complaints were dropped after Wirecard collapsed."Many didn't want to believe that fraudsters were at work at Wirecard," Volker Bruehl, a professor at the Center for Financial Studies in Frankfurt, told AFP.
• EY is now facing legal action from Wirecard shareholders since he signed off on the firm's accounts for a decade.
• The former CEO Jan Marsalek is still missing.
• As per Braun the Austrian Marsalek is behind the entire scandal and he is just a mere victim.
• The Wirecard saga has now turned into articles, books, documentaries, and a film. It stars the popular German actor Christoph Maria Herbst as Braun.
• While in the Netflix documentary "Skandal! Bringing Down Wirecard", journalist McCrum talked about his perspective of the story and the leaked documents.

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