Small investors receive only around 170 euros out of 3,000 euros invested. Their total loss totals almost two billion euros. Wirecard offered solutions for electronic payment transactions as well as for the issuing and acceptance of credit cards. Massive balance sheet forgery led to the opening of insolvency proceedings on 25 June 2020. The share price fell to the bottom.
The media are right to denounce the accounting group Ernst & Young, which for years did not want to have noticed anything and had its services paid for by Wirecard. And they rightly denounce the German financial regulator Bafin, which let the retail investors run into the knife. Instead of pinching Wirecard, Bafin had filed criminal charges against the unwelcome journalists of the Financial Times (FT). Wirecard also sought damages from the FT. Other media left the Financial Times in the rain.
Also no reliance on the critical view of the media
However, the media should not only criticise third parties, but also address their own blindness. Media outlets are also responsible for the fact that so many investors have lost their money. After all, the leading Financial Times, which is read on all business editors, had already informed in 2015 of inconsistencies in Wirecard’s payment and accounting practices, under the cheeky title “The House of Cards”, which pointed to a House of Cards. Two editors of the Financial Times intensified their research over the following four years and regularly published disturbing information about Wirecard.
Paul Murphy, one of the two FT editors, was surprised that German media did not inform about the research of the Financial Times. On the contrary: “We were irritated by some of the initial reporting in Germany because it took over the presentation of Wirecard without questioning it.” (quote from the NZZ)
In 2018, the “Handelsblatt” and the “Frankfurter Allgemeine Sonntagszeitung” celebrated Wirecard CEO Markus Braun as “Starter of the Year”.
SDA distributed many PR articles for which Wirecard paid
In recent years, the Swiss Depeschenagentur has only disseminated non-critical contributions via Wirecard until spring 2020. This is not surprising: most of the articles about Wirecard offered by the SDA were paid for by Wirecard itself. In order to improve its budget, the SDA is increasingly spreading paid PR contributions. Under the titles it is called “Original Text Service”. The SDA also calls it “Corporate Content”.
In plain language, these are PR articles that the SDA obtains from its “cooperation partner” “news aktuell”. According to its own information, this subsidiary of the German Press Agency only mediates “PR content”. The company boasts on its homepage: “News up-to-date content is available in all important media formats.”
In total, the SDA has distributed more than a hundred articles about Wirecard in recent years, which Wirecard paid for. Many media outlets have adopted these articles distributed by the SDA – without making it clear that they were paid company PR. In the Swiss media database SMD, it is not clear whether the SDA articles are editorial or paid contributions.
When asked, SDA editor-in-chief Nicole Meier did not want to say how much the SDA had collected for the Wirecard items. The SDA’s annual report merely shows that the SDA took in a total of more than five million Swiss francs for widespread corporate content in 2019 alone. That was 12 percent of all revenue.
Only in the last few months did the SDA inform in its “basic service” of the collapse of Wirecard by taking over articles from the financial agency AWP, in which the SDA has half of the stake.
Also “Finance & Economy” and “NZZ” as mouthpieces of Wirecard
Also in February 2018, the Swiss “Finance & Economy” headlined: “Wirecard is growing strongly for ten years”. Sales rose by a staggering 45 percent to 1.5 billion euros in the fourth quarter of 2017. “Finance & Economy” quoted CEO Markus Braun: “We have a good chance of beating the market by 50% for several more years.” Not a word about the massive inconsistencies that the Financial Times has been reporting on since 2015.
As recently as September 2018, the “NZZ” headlined: “Wirecard makes German banks look old – financial service providers are ousting Commerzbank from the DAX”. Michael Rasch, NZZ economics correspondent in Frankfurt, wrote of the “upstart from the Munich agglomeration”. On 11 November, he admiringly reported in the “NZZ”: “Wirecard is worth €19.4 billion more on the stock market than the largest German financial institution, Deutsche Bank.”
It wasn’t until February 2019 that the “NZZ” dawned. Quickly titled with a critical undertone against the “Financial Times”: “FT shoots Wirecard storm-ready”. In the past ten days, the British business newspaper has reported three times on financial irregularities. On the Frankfurt stock market, the company’s shares were then spun into the depths. But this was followed by the interim title “Unproven allegations”. Rasch pointed out that Wirecard “vigorously rejects all the accusations made”. And Rasch insists: “To date, nothing has ever been proven.”
Then finally, and all the more radically, the U-turn. Thus, on August 12, 2020, the “NZZ” concluded:
“Wirecard could have cheated unmolested for much longer, and the auditors Ernst & Young and the German supervisory authorities would have remained in deep sleep had the ‘Financial Times’ not existed.”