Wirecard files for insolvency after financial hole laid bare
dw.comI wonder how many companies in the world are basially built on warm words without any real value behind. I made the experience that a lot of people don't really care if a company has positive revenue streams anymore, they don't even know what a balance sheet is. They simply invest because other people do. And those other people invested because people before them did. This new style "invest billions now in a lossy start up and hope for a positive cashflow in a few years" is absolutely insane, it transformed the economy into a pure gambling hall.
What makes it even worse, in case of wirecard, their auditor EY had audited and certified wirecard's balance sheet for years with no objection. They were satisfied with a clumsy fake audit certificate for 2 billion euros in a Philippine account! For how many companies EY did the same? How superficially do they check their customers?
The EY point is interesting. I'm not sure if it's still this way, but when I worked there, a lot of care was put on audit clients as the partner(s) signing off the work had effectively unlimited liability, and could lose pretty much all their money in a worst case scenario.
Unfortunately audit work, where the company decides on their auditor, has an in-built conflict of interests. If the auditor is too harsh/rigorous, then they risk losing the audit. If they're too lax and miss something material, then they risk lawsuits and regulator attention.
Then for large companies there's further complications liket doing the audit may preclude a company from doing other (more lucrative) consultancy work, or that large companies essentially only use one of 4 companies to do their audits, which leads to people rotating through that but little effective competition.
> The EY point is interesting. I'm not sure if it's still this way, but when I worked there, a lot of care was put on audit clients as the partner(s) signing off the work had effectively unlimited liability, and could lose pretty much all their money in a worst case scenario.
Does it ever pan out the way? I'm speaking of the liability on the partners. There have been a number of these in recent times involve pretty much all of the big firms.
Arthur Andersen was a large accounting firm which went bankrupt after their client Enron went belly up. https://en.wikipedia.org/wiki/Arthur_Andersen
It's a double edged sword for Audit companies. On one hand if they get hard on auditing, their clients may not keep them for longer but on the other hand if they stay soft and more scandals like these happen under their watch then the genuine clients may not keep them because they don't do auditing properly and find issues earlier.
There actually seems to be very little accountability for the audit firms when this happens.
https://www.google.com/url?sa=t&source=web&rct=j&url=https:/...
> If the auditor is too harsh/rigorous, then they risk losing the audit
How is this a thing ?
In my experience with auditors, harsh/rigorous does not necessarily mean better because the auditor’s mindset makes an enormous difference. I’ve had process-focused people spend days of their time and mine digging into things that do not have a material impact on results. Unfortunately, even if people have the best intentions, I think that process-focused-but-loose and results-focused-but-rigorous can be easy to mix up, especially for people not in the weeds.
Because it is an absolute race to the bottom (on price) when it comes to Big 4 audit. There is really no distinction or difference in services provided between the firms. You can practically switch from EY to one of the other three (if they don't mind excluding themselves from consulting work) overnight.
Disclaimer: work for Big 4 but in tech consulting, not audit.
OTOH it was the Big 5 until Arthur Anderson gave up its license due to the Enron fraud.
So there's an incentive to audit correctly.
There's the same kind of incentive not to be the closest moth to the lightbulb, and yet....
The race-to-the-bottom/die-at-the-bottom reward structure only prevents disaster if the racers are invested for the long term. The agents in charge will have a high tolerance for that kind of risk if they hope to retire/sell before the money train jumps the tracks. I don't know if that's a hazard this industry is currently falling into, but it's a likely failure mode if nothing sufficiently enforces agents taking a long view.
Because you can switch to another firm which is more friendly to you.
There are certain practices that a company does, and various auditors have different opinions on it. For example, in PCI there are ways of interpreting certain requirements: and when you choose an auditor, you want one that agrees with your approach, and don't want the one that insists on different approach.
Auditing large corps is a profitable business with only a few players "capable" of doing. If one auditor asks too many questions the competitor is happy to take over.
I have a relative in finance and he says this sort of issue is a lot more prevalent, it's just easier to hide when things are good. When times are bad it's more difficult so more get found out. But it's important to remember that people have been sounding the alarm about Wirecard for years and Worecard, the German government and German Finance Authority (BaFin) have gone after the short sellers and journalists who have tried to expose it. Very few involved have any incentive for these to be uncovered, those that do generally have a lot less power than those that don't want it found out and they will happily use that power to intimidate and destroy their opponents.
I would have almost said "blockchain"... But in all seriousness, if nobody bothered to cross-check 1.9 Bn in the Phillipines, even after all the reports hat came out, the Sigapore investigations and so on, even blockchain wouldn't have done a lot of good. One call at the Phillipines banks would have been enough...
Warren Buffet would say that when the tide goes out you see who is swimming naked.
> They were satisfied with a clumsy fake audit certificate for 2 billion euros in a Philippine account! For how many companies EY did the same? How superficially do they check their customers?
A lot.
Like a lot a lot.
The entire* commodities sector is built on promises like this.
The entire shipping and freight sector.
The entire commercial paper market.
Its promises, redundancies, assurances, and credit.
It usually doesn't go wrong. As long as bond holders get their 2% and common stock shareholders get wiped out, everything is A-OKAY.
(entire is hyperbole, the point is clear, don't be that guy)
But the commodities sector has entire organisations built around checking that cargo of cane sugar /coffee really is what it says what it is.
Edited for spelling
> But the commodities sector has entire organisations built around checking that cargo of cane sugar /coffee really is what it says what it is.
Do the companies pick their own checkers?
See: Hin Leong Trading for a current example.
and by "massive forgery" it just means "normal forgery" but with a few extra zeroes typed in.
this is how the whole world works! on relationships and clout, not technology and verifications. everyone at the bottom has to deal with those pesky assurances of credibility. others are just getting random people with law degrees to provide attestations saying that their client's document is legitimate.
When the scam is big enough, there are consequences for the auditors. Enron sank Arthur Andersen, for example. Didn’t hurt the consulting arm (now Accenture) though.
I initially understood this to mean Accenture changed its name as a consequence of the Enron/Arthur Anderson scandal. But Anderson Consulting changed its name to Accenture in January 2001, and the scandal only became public later that year.
Seems like the two companies weren't very close even before that, the name change was required as part of a legal settlement with Arthur Anderson.
https://en.wikipedia.org/wiki/Accenture#Split_from_Arthur_An...
That split was always pretty interesting to me. It seemed Andersen Consulting bristled at being attached to Arthur Andersen, mostly because Andersen Consulting had to pay 15% of their profits to Arthur Andersen. I figured that the limited partnership nature of consulting/accounting businesses meant that even individual divisions maybe felt their business was their business. The breakup started in 1997, but yeah it was ironic that they had agreed to jettison the name right before Arthur collapsed.
Pretty sure that the partners in Anderson took a big haircut after Enron.
If you audit basically the entire global economy every year and you're going up against people willing to forge & collude something is going to slip through each year. Sure you may catch 99% of the cases. But that one that does make it through has people asking stuff like:
>For how many companies EY did the same? How superficially do they check their customers?
Public perception of audits is basically a giant example of survivorship bias. All the stuff that auditor do catch generally gets fixed without it making the news. Cause you know confidentiality.
It's not a widget factory where six sigma is possible. It's a messy imperfect process, because well the global economy & most businesses are. 100% is about is plausible as demanding that all programmers globally write bug free code. It's just not happening.
That said...2 billion is like 1/3rd of the company assets. That's one hell of an oversight even in light of the above.
I'm wondering why the CEO called in KPMG for an independent audit. Was he expecting a different result? Or he just picked them to break the news?
Buys him time, the audit was necessary otherwise bonds/loans became due or a finance line would be withdrawn. By switching to KPMG he bought himself some time, probably to hide some of the assets they would likely try to seize, so that once he has done his 18 months he can go back to his multiple homes and yachts and live comfortably.
KPMG in german stands for Keiner Prueft Mehr Genau: nobody checks thoroughly anymore. I guess he just thought they would provide the desired result...
At some point you start believing your own lies so he probably thought everything would be fine and the markets would be calmed with another auditor confirming the results.
This exactly. Allegations of fraud had also bubbled up several times in the past and he was able to take care of them. I would imagine he didn't expect this time to be any different.
Auditing is required by law.
Auditors work on assumptions, they assume that the document presented to then are correct and not falsified. If they cannot see that the document is falsified and didn’t see any indications that might raise questions either, how can they be held liable?
OTOH, why does a German company keep 2 billion euros in a Philippine account, that’s strange.
How can you find out about who is auditing a company?
For public U.S. companies, the annual shareholders' report (available on the company's web site) usually includes a letter signed by the auditors certifying that the reported financial results are accurate.
Same in France
They have to sign the books that its done properly.
Doesn't surprise me in the slightest.
Worked for a fintech company a few years back that used Wirecard as the processor for one of their products. Somehow they managed to lose the PK/FK relationship between accounts and transactions (or something like that). A whole lot of our customers suddenly started getting other people's transactions on their accounts. It was the final straw that shutdown the entire product line and we moved on to other providers for new projects.
So, not at all surprised they don't know where their money is.
So basically the cardinal sin of payment processing then? Not that I'm surprised.
I say cardinal sin would have been not storing amounts as integer.
(googler, opinion my own)
Just go give 2 ways of doing money storage in ints from Google's APIs...
For Google's Standard Payments APIs, we use micros: https://developers.google.com/standard-payments/v1/fops/bank...
> To represent a monetary value in micros, multiply the standard currency value by 1,000,000.
> USD$1.23 = 1230000 micro USD
Sadly, its different than other parts of Google with money/amount based APIs. GCP uses units + nanos: https://cloud.google.com/billing/v1/how-tos/catalog-api
> [UNITS] is the whole units of the amount. For example if currencyCode is "USD", then 1 unit is one US dollar.
> [NANOS] is the number of nano (10^-9) units of the amount. The value must be between -999,999,999 and +999,999,999 inclusive. If units is positive, nanos must be positive or zero. If units is zero, nanos can be positive, zero, or negative. If units is negative, nanos must be negative or zero. For example $-1.75 is represented as units=-1 and nanos=-750,000,000.
From reading other comments it seems that "micros" aren't precise enough to represent one satoshi if the unit is whole bitcoin.
There's a cardinal pun somewhere in there but I can't think of it.
Bird, position in the Catholic hierarchy, countability, or direction wise?
Something to do with using floats to indicate cardinality briefly plummeted, but was summarily dismissed.
Regardless, losing track of the numbers to accounts reminded me of this one place I worked where the transaction geese weren't recorded as explicit callouts on the transaction ledger, but rather had to be cross-referenced with final transaction amounts and the fee configuration for time period, but where the changing of fee configurations were not tracked with a granularity sufficient for resolving all ambiguity come audit time.
And I thought that was bad.
... but I can't place it.
This would be a top tier joke if only we could rank it.
No losing the user-to-number relation is way worse than a bad number representation.
Just curious, how would you manage bitcoin fractional shares.
Bitcoins are represented as integers. A whole Bitcoin is 100MM satoshis.
Typedef int64_t CAmount;
Static const CAmount COIN = 100000000;
Static const CAmount MAX_MONEY = 21000000 * COIN;
Why would you need fractional bitcoin shares? The smallest unit of bitcoin isn't 1 bitcoin (like with stocks), it's 1 satoshi or 0.00000001 bitcoin.
Arbitrary precision arithmetic.
A total of around $2B has simply "disappeared" -- as in, no one yet has been able to figure out what happened to it.
I keep imagining a Monty Python-esque skit:
"Was it stolen? We don't know."
"Was it spent? We don't know."
"Was it lent? We don't know."
"Was it transferred? We don't know."
"Was it burned? We don't know."
Coincidentally, or maybe not, the company's last fictitious balance sheet, which was published in November of last year, right before the scandal was revealed, reports approximately $2B in long-term debt.[a]
So, as much as Wirecard was in the business of processing financial transactions ($124B last year!), it was also secretly performing a magic act of borrowing money and making it disappear into thin air. In a way, it's been an "impressive" performance.
On a more serious note, I hope Wirecard's failure is not seen in hindsight as a "Creditanstalt moment."[b]
--
[a] https://ir.wirecard.com/download/companies/wirecard/Presenta...
[b] The failure of Creditanstalt, an Austrian bank, in 1931, marks the beginning of the Great Depression in Europe: https://www.bis.org/publ/work333.pdf
Hin Leong[0] is about to go the way of wirecard with a ’hole’ of mere $3B USD.
I’ll hazard that we’re seeing only the firsts in a wave of [cooked up] companies imploding.
[0] https://www.wsj.com/articles/massive-forgery-helped-hide-3-b...
COVID-19, and the accompanying economic down turn has a, hopefully positive, side effect. it exposes all the fault lines, all the cracks and quite a few high level crooks. In business, finance, society. Let's keep fingers crossed that longterm effects aren't too severe.
They never had the money in the first place.
Here's the rest of the stack so far:
https://news.ycombinator.com/item?id=23611347
https://news.ycombinator.com/item?id=23573386
https://news.ycombinator.com/item?id=23598824
https://news.ycombinator.com/item?id=23438323
This, from a year ago, reads interestingly now: https://news.ycombinator.com/item?id=19737344
Invisibilia just released a great podcast about trust, based on the experience of a trader who was harassed by Wirecard. The trader, who was shorting Wirecard, was subject to surveillance, and a constant stream of phishing attacks.
I'm not sure this podcast is so great. It's a self-promotional piece that takes ages to convey any information and get to the point. I regret listening to it.
Well, the first half of it was a podcast about that trader. Then it abruptly shifts into ... I don't know what. A general talk about trust or something.
It left me confused and unsatisfied.
Invisibilia is a podcast about emotions. The second half is fairly typical episode.
Many episodes of Invisibilia deal with similar topics as Hidden Brain. I find Hisden Brain better and think Invisibilia should be merged. I don’t like Invisibilia that much because it a lot about feelings and the talk is so much that I cannot grasp the main point of the discussion.
I just listened to it this morning when it came up in my feed. I had added this episode after it was mentioned in a previous HN thread about Wirecard. I guess the short seller was proven right.
How would wirecard learn who is actually shorting them?
Because the trader was public that he was shorting and why, and filed complaints with the German regulators.
This looks really bad for BaFin, they basically treated the Financial Times as criminals for blowing the whistle over the last few years.
>This looks really bad for BaFin, they basically treated the Financial Times as criminals for blowing the whistle over the last few years.
It's going on, with a variety of companies, every day. The entire system is beyond corrupt. Regulators are siding with frauds instead of investigating them.
A major red flag of corporate fraud is attacking journalists and blaming "short-sellers". Have these entities ever caused the demise of a legitimate company?
Does it matter if the corrupt BaFin officials who decided to treat the journalists as criminals are not prosecuted?
Now is clear what the company motto "Beyond payments" means.
This is painful but it's a step in right direction. They have to serve ongoing processes for a couple of more weeks/months. All subsidiaries that can be sold will probably be sold to pay creditors. Hopefully all toxic parts will be removed and a few healthy ones will stay, in one way or another.
This is the second ceo who started to dress like steve jobs and became a fraud.
Should we be worried about Xiaomi? https://www.gizchina.com/2011/08/17/xiaomi-ceo-chinas-latest...
Based on more recent photos, it was just a phase. Maybe the company fixed its issues before it got caught?
This is an interesting observation... we should catalogue them.
Anyone know if Transferwise Global debit cards are impacted by this?
TransferWise worked with Wirecard for a short time between February 2017 and September 2018 as its debit card issuer in the UK and Europe. The partnership was terminated in September 2018 and has since obtained its own issuance license for cards through Mastercard. TransferWise has no business ties to Wirecard today
the Wirecard Bank is a subsidiary, that has not filed for insolvency. (disclaimer: they are checking if they need to file for the subsidiaries as well - though my guess is they are trying to minimize the impact on the operations and bank transactions, to save the future of the product).
scratch that.
Bafin (german bank watchdog) just froze the accounts, incl. cards of Boon, which is a wirecard subsidary.
I doubt it will. Wirecard powers too many transactions. It’s going to go into administration and someone is going to pick it up.
Too big to fail
You realize that they probably have literally zero money?
That’s irrelevant. They have customers with complex integrations who can’t move. That’s worth a lot of money. Someone will want to acquire that.
I'd tend to believe your take on it. Pulling the rug from all the companies using Wirecard to process payments could cause mayhem.
Though when it comes to a buyer, hard to tell how they'll be able to get to a fair valuation given the fairytale numbers they have in their books.
> Though when it comes to a buyer, hard to tell how they'll be able to get to a fair valuation given the fairytale numbers they have in their books.
I always pictured the court auctioning off assets in a firesale to the highest bidder. Is that not how it works?
I am not sure, I suppose an administrator may want to tear the guts out of the business and try sell off the parts of value.
Was just thinking of the people that rely on Wirecard for transactions at the moment, switching them off doesn't seem sensible for any outcome.
That really depends on the level of debt that charges the company. If it's very high you won't get that before the bankruptcy court finishes their job.
The fact that you need something doesn't mean you'll get something.
Another big one is Payoneer.
Rushing my balance out as of now, just in case.
The entire story is shameful. I can just hope the Germans learn lessons from this.
The lessons learned will be "hide your crimes better". And a few token gestures. This kind of crime is just too profitable, and the "little man" will not start any larger protests over it. So there is no desire anywhere in substantial changes.
Billions of dollars just turned out not to be there. I'm going to throw out a challenge to the idea that the "little man" was the loser here on the basis that little men do not have billions of dollars to lose. Someone bigger than little lost here.
If every man, woman and child in Germany chipped in $1,000 that still isn't a billion dollars.
It'd be around 80 billion dollars, actually
I think he confused the us billion (10⁹) with the german billion (10¹²) ;)
What? So what do German use for 10^9, Milliarden?
In French we use Milliard for billion and Trilliard for Trillions (and millions for millions).
Wow, French living in Germany for over 10 years, never realized that Billion meant something else here.
I guess I'm not rich enough, ahah.
yep. Millionen, Milliarden, Billionen, Billiarden, Trillionen, Trilliarden
but he used "billions" correctly in the first sentence
Yeah, that's probably it!
Pension funds, general investments, small-time stockholders will loose money, and all that does affect the "little man". It is just indirect and hidden enough that most won't complain.
How many people do you think live in Germany?
Less than 8,000 apparently.
Common mistake if you come from a language using the long scale: https://en.wikipedia.org/wiki/Long_and_short_scales
I guess instead of saying "a billion dollars" we should say "1 Gigadollar"
Mmm, I'd like to spend no more than half a kilorupeee on dinner.
I was surprised the first time I read about crore and lakh, they take some time to get used to.
>I can just hope the Germans learn lessons from this.
N'ah! When it comes to big banks, big industry, big infra projects, German state institutions are super corrupt, it makes Wall Street and the City of London look like saints.
German here. Big infra projects here rarely fail due to corruption. The way, way bigger issue is that in the last 30 years public service funding was drastically cut which meant that the oversight competence over projects was no longer in house. Overworked officials rubber-stamp utter bullshit because they have neither the knowledge nor the time to properly audit plans. Not just architectural or technical (hello BER fire suction system), but especially financial.
The mandate from the EU is that all kinds of stuff must be offered via tender europe-wide which is for many things a colossal waste of money and enviromental resources (e.g. a Polish company wins a tender for a construction project in Spain and now has to move all the machinery and staff through Europe and back, that's NOT sustainable!), and while government entities are allowed to judge bids by sustainability or profitability (i.e. purposefully offering an unprofitable bid in the hopes of making the profit with exploiting "change requests"), they rarely have the knowledge to do so.
The trouble is that lack of public tender means cosy deals, national champions and less of a free market.
If some costs aren't being priced in, then procedures should be changed to price them appropriately. I'm not sure the answer is to permit cosy deals between politicians and their patron companies, or depriving citizens of the services of best providers in the market.
I'm not sure the City of London can be made to look like saints of financial regulation, given their previous problems with PPI mis-selling, and the disintegration of a number of supposedly "safe, well capitalized" banks in the 2007/8 crash.
Whilst you'd hope that lessons were learned, I'm not sure they were.
That was the banks and insurance companies.
Comparatively, that's unlikely to be true.
€1.9bn is pocket money compared to Wall St's and the City's more creative frauds.
The UK is currently dealing with a government minister who was involved in questionable planning oversight for a single development scheme worth £1bn - and that's barely even a footnote in the news here.
By 'barely even a footnote', you must mean front page news on most newspapers today: https://www.bbc.co.uk/news/blogs-the-papers-53173316
In a historical context, that's still a footnote.
Especially compared to - say - the suppressed Russia report, or the non-existent disclosure about the true sources of funding for Brexit, or the fact that the government wasted £12m on an app that does nothing, or the sum total of various other Brexit- and Covid-related contracts to various government cronies, donors, and associates, and which appear to have supplied nothing of value to taxpayers.
Sources?
Wirecard, Dieselgate, BER Airport, German gov wireing the whole country with copper instead of fiber because the ministry of infrastructure had connections to the copper business leaving the country's internet behind Ukraine, all Gov IT projects going to SAP or T-Systems with no accountability, etc.
Nobody went to jail for any of those and in some cases it was never investigated. If you're on the DAX, you're untouchable in Germany.
You forgot about Deutsche Bank. David Enrich has written a lot about criminal activities going on in there. It is a bank for the "unbanked elites", that is for people that will no longer be accepted by any other financial institution.
That being said - we will certainly see a lot of fraud in other countries too. The fraud cycle follows the business cycle.
Deutsche Bank is not a state institution, neither is it partially or fully owned by a state entity (like Deutsche Bahn or VW). The national bank would be deutsche Bundesbank.
Scandals are everywhere, as is corruption. In comparison, Germany is #13 on the Democracy Index [1]. It is right below The Netherlands and Switzerland, the top countries being the Scandinavian ones, plus Anglo-Saxon countries (New Zealand, Canada, Australia).
AFAIU the Democracy Index is based on, essentially, people making up numbers.
The broad classifications are probably alright, but I wouldn't pay much attention to the specific rankings.
Do you have a source for the copper claim? That is entirely new to me.
https://www.spiegel.de/netzwelt/web/deutschland-warum-unsere...
[Translated from German] Christian Schwarz-Schilling had been Post Minister under Helmut Kohl since 1982 and launched the German mobile phone network at the end of the 1980s. His political understanding of infrastructure can be seen in a disturbing fact: Until a few hours (!) before he was sworn in as Post Minister - Schwarz-Schilling was involved in a copper cable company. He sold his shares to Nixdorf. The company was then "one of the most important newcomers in the cable business". Contrary to most expert advice, Schwarz-Schilling pushed the extensive investment in copper cable instead of fibre optics during his term of office, in other words: politically, he acted entirely in the interests of the buyer of his shares. In any case, exactly 30 years ago, SPIEGEL called the mobile phone licensing for which Schwarz-Schilling was responsible "a festival of lobbyists".
The fact that nobody got jailed for this obvious corruption is staggering to me and German politicians dare lecture Southern Europe on corruption.
More recently, Germany's insistence to go all in the hydrogen economy has the same flair.
Hydrogen is a backup plan, and a sensible one at that. Germany doesn't have much in terms of lithium and other precursors for batteries, besides we have an awful lot of old rural non electrified train routes where the cheapest option by far is to go to hydrogen.
Holy hell. Thanks for this one.
@Fnoord (can't respond to your comment directly weirdly) How can anyone seriously rank Australia and the UK so far high up?
I am really unsure if it's something "Germans" need to learn. It is probably something that could happen everywhere...
Whilst I wouldn't put it that way , it does seem like the German financial regulators and investment industry have something to learn from the Wirecard problem.
When the FT and others started raising concerns about Wirecard's finances, BaFin took what I believe was an unprecedented step and sued the FT.
A better approach might have been to launch an earlier investigation into whether the allegations had any substance to them.
There also need to be lessons learned from an audit perspective. EY signed off on previous years accounts which now appear that they might have had issues...
It's on the German financial monitor to have chosen "stop short selling" instead of "let's investigate this" when allegations surfaced last year.
In this sense, it's the Germans that need to learn something. It seems there is awareness of this[0].
Hopefully others will learn from it too, anyway.
[0]https://www.bloomberg.com/news/articles/2020-06-22/wirecard-...
It could happen anywhere -- the US has it's share of cowboys too. WeWork, Thanos etc. Ireland too has had a few cowboys.
Merkel might have to step in to clean this up -- it's embarrasing because of the number of German institutions that protected this fraud. The German Financial Regulator went after professionally accredited investigative journalists and seemed to indulge in other face palms.
Thanos, the famous Elizabeth Holmes' company that tried to kill the Avengers
Theranos. Certainly a hell of a typo.
With one snap of one's fingers, half the company's 'value' dies in an instant.
Theranos didn't try to kill the Avengers though.
One weird thing I have noticed is that in the UK the phrase “The Germans” is often used instead of “Germany” (where it’s grammatically valid, of course) for some reason. It’s really noticeable if you watch British TV coverage of the World Cup or European Championships.
Don’t know if the OP is British or living there, but it’s possible that this is what’s happening and they don’t mean “all Germans ...” and just mean “The appropriate body in Germany the country ...
Very common here in the US to do this with all countries. "Germany" is a country, whereas "Germans" are people. So in a sporting context saying something like "The Germans are better at passing the ball" makes more grammatical sense than "Germany is better at passing the ball". Same for the Italians, the French, etc.
It’s not quite the same actually. You’ll see the commentators occasionally reference Italy/The Italians or France/the French ... but the way they use “The Germans” is on a different level. I also feel like it’s also said with a weird intonation, so not “The Germans” but “The Germans” - with a little snarl :-D
I don’t know how to explain it - you’d need to watch a World Cup with BBC and ITV coverage to see it in action. England have a special footballing history with Germany so it may be related to this.
Note: not implying this was what the original person meant, this is just a silly tangent :-)
I think UK English carries the intent that Germany is a physical place - an abstract legal notion. While The Germans are the people who live in this place. The place and notion can't really learn anything, while the people who live there could learn something.
German regulators absolutely do have to learn that this isn't something that could only happens elsewhere.
I agree. But that’s very different from saying “The Germans”
What should I learn from this? That there are fraudulent companies? You make it sound like all Germans are responsible for this.
I hope at the very least this Beissreflex that every shortseller is evil and should be investigated gets curbed. Wirecard since 2008 was having the support of Bafin of going against journalists and shortsellers who were calling out the company for market manipulation.
In Germany shortselling has an incredibly bad reputation. I think this is a problem.
The kneejerk insulted reactions to the original FT articles by BaFin and the German business press really haven't been up to par. They need to do a lot better.
That prosecuting journalists for reporting that a company is fraudulent should, at a minimum, be reserved for after it has been established that the company is not fraudulent.
Yeah, like the Americans with Madoff? Who "did not run a hedge fund but provided services to hedge funds"?
The SEC had also data provided from professionals that Madoff is either fraud or a ponzi and always ignored it. The sentence above was enough that they did not further investigate him.
What lessons exactly? Did they learn anything from the VW scandal?
The type of behavior that brought Wirecard down is not a German thing, it is a human thing. We have the ability to think outside the box for profit and greed, and that, sometimes, gets us into trouble.The Munich prosecutor's office, which is already investigating Braun on suspicion of manipulating Wirecard"s accounts, said "We will now look at all possible criminal offenses."Another aspect is that the financial auditor responsibility. I am not sure if the financial auditor criminally complicit but I think we are going to figure it out soon.
Any lessons learned from Dieselgate? Or from Danske Bank laundering 236 bilions Russian money?
C'mon this is Europe... We are forgetting quickly here..
Will their cards still work?
Trade on shares in the
company was suspended
If it only was suspended at the Frankfurt stock exchange which is mentioned in the article, it would be interesting to see how it is doing at other exchanges.
Google is still showing realtime Frankfurt prices. Currently at a market cap of about €350M.
And what is the reason behind that? Is it guaranteed that shares of a company that files for insolvency are worth 0? And therefore the exchanges want to save uninformed investors from buying them?
> What does this mean?
That you can not trade the stock for now. Trading has been resumed. On many stock exchanges there are rules for this. Something very common.
> And what is the reason behind that? Is it guaranteed that shares of a company that files for insolvency are worth 0?
No. The company could recover, could get bought etc. As a stock holder you are the last in line. Should the company get liquidated, bond holders will have a higher priority for any money recovered.
> And therefore the exchanges want to save uninformed investors from buying them?
No. Please look up Hertz, the car rental company and what is happen recently the stock. They are bankrupt, people are buying the stock and Hertz was even allowed to issue more shares.
>They are bankrupt, people are buying the stock and Hertz was even allowed to issue more shares.
Eh, sort of. The bankruptcy judge said they could, but the SEC said they had some "questions" about the offering's prospectus and Hertz basically withdrew the offer after that. It's not clear whether the company actually sold any shares.
Planet Money’s podcast this morning covered just this topic RE: Hertz.
> Google is still showing realtime Frankfurt prices. Currently at a market cap of about €350M.
Trading had resumed by then. It was supended temporarily (for one hour) just before the announcement.
All other major german exchanges are up and running and allow trading of Wirecard stock... you can see the latest realtime trades from Tradegate (Berlin) here https://www.tradegate.de/orderbuch_umsaetze.php?isin=DE00074...
What other exchanges are they listed on? It is pretty uncommon for a company to ever list on more than one exchange.
Depends. Very common for non-US Shares (Germany, China, UK etc.)
Maybe we just disagree about what "common" and "uncommon" mean in this context.
What actual percentage of the 100,000+ public companies around the world trade on another exchange?
Most of the DAX 30 in Germany don't even trade on another exchange. Adidas doesn't. BMW doesn't. Siemens doesn't (they were delisted by the NYSE in 2014.) Does any of the DAX 30 trade on an exchange outside of Germany?
As far as I can tell, only 8 companies in Germany trade on another exchange but maybe my source is wrong.
Shell is dual listed and plenty of foreign companies have ADR's on the US exchanges
Almost no ADRs trade on US exchanges. There are over 100,000 public companies in the world and the NYSE has only 506 non-US issuers. I'd call that pretty uncommon.
I said it was pretty uncommon, not that people couldn't name individual, rare examples.
> What does this mean?
Since the company has filed for insolvency the shares can no longer be traded.
> Is it guaranteed that shares of a company that files for insolvency are worth 0?
When a company files for insolvency it means the companies total liabilities are greater than the total assets.
And when this happens the company is handed over to a liquidator and they then decide how to handle the companies future.
What the liquidator normally does is try to sell the company or parts of the company to other third parties.
With the proceeds of that sale they then pay back the debt.
Then if any money is left over they split that money between the shareholders.
But naturally since the debts are greater than the assets the shareholders will get very little of their original investment back.
Since the shareholders are last in the line for the money they tend to lose the most.