October 24, 2020

Wirecard Drama of the Day: Hundreds Got Pink Slips at German Headquarters

This was actually reported on Wednesday by several outlets, including the Financial Times, so in case you were spending more time on your OnlyFans side hustle than on work yesterday and missed it:

Wirecard’s administrator has cancelled the contracts of its chief executive and two other senior managers while cutting 730 staff at the collapsed German payment company’s headquarters in Bavaria.

The moves follow the formal decision by a Munich court on Tuesday to kick off the insolvency proceedings for seven Wirecard subsidiaries and officially transfer decision-making powers away from the company’s directors and executives to the administrator.

FT reported that hundreds of Wirecard employees at its headquarters in Aschheim, near Munich, got an email on Monday night that they would be “irrevocably released” from their contracts on Tuesday.

The administrator said “far-reaching cuts” were necessary to “make any kind of continuation possible”. It plans to reduce staff numbers at its Aschheim office from 1,300 to 570, of which 220 will be in its Wirecard Bank subsidiary that is not part of the insolvency.

In addition, the administrator said the three remaining members of the executive team “will also be terminated due to insolvency,” FT reported. That includes James Freis, who took over as CEO on June 19; Alexander von Knoop, who has been CFO since 2018; and Susanne Steidl, chief product officer since 2018.

Meanwhile, in PwCland:

The global chairman of PwC has pledged to “aggressively” review how the firm can better hunt for frauds following Wirecard and other accounting scandals.

“We want to make sure we’re moving forward [on the detection of fraud] to ensure the relevance of the profession,” said Bob Moritz, who has run the accounting and advisory giant for four years.

“Wirecard is yet another example of the fact we need to look at this and do it aggressively over the next few years,” he said.

BoMo added that PwC had to “double down” on the quality of its audits during the coronavirus pandemic as investors “have needed more and better trusted information from corporates” given the economic turmoil unleashed by the crisis.

The problem is PwC and audit quality haven’t gone hand in hand of late, as the firm botched 25% of its audits in the U.S. and 35% of its audits in the U.K., according to P. Dubs’ most recent inspection reports from audit regulators.

Wirecard chief and 730 staff cut as administrator takes charge [Financial Times]
PwC pledges to review fraud detection after Wirecard scandal shakes industry [Financial Times]

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