Official liquidators appointed to Wirecard's Irish arm

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Official Liquidators Appointed To Wirecard's Irish Arm
Wirecard's Dublin office was searched by gardai last July following a request for assistance from the German authorities. Photo: Getty Images
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Ann O'Loughlin

The High Court has appointed joint official liquidators to the Irish arm of failed Munich-based electronic payments provider Wirecard AG. The  company is subject of an investigation by the German authorities over an alleged fraud.

The current assets of Wirecard UK and Ireland Ltd (WUKI), have slumped from a book value of some €556.5 million to €6.7 million with the net liabilities estimated around €83 million, the court heard on Monday.

Hole in accounts

Wirecard AG (WAG) filed for insolvency earlier this year, owing creditors €4 billion after disclosing a €1.9 billion hole in its accounts that its auditor EY said was the result of a sophisticated global fraud.

On October 28th last, the High Court granted an application on behalf of WUKI, employing 21 people, to appoint Ken Fennell and James Anderson of Deloitte as joint provisional liquidators.

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When the petition returned before Mr Justice Brian O’Moore on Monday, he was satisfied, having heard counsel for the company and the provisional liquidators, to appoint Mr Fennell and Mr Anderson as official liquidators.

The judge said there was “uncontradicted and powerful” evidence the company was unable to pay its debts as they fall due and a special resolution had also been passed by the company in favour of winding up.

Because of the ongoing investigation into alleged fraud, the judge said he would be “reticent” in his remarks.

Corporation Tax

He noted the liquidators, represented by Brian F. Conroy BL, had reported the current assets of the company have slumped from a book value of €556.5 million to a net realisable value of some €6.7 million. The management accounts also provided for liabilities of €87.6m with an adjusted liability of some €83.2m after set off intercompany balances.

The liquidators reported they are prioritising the possibility that €43 million of Corporation Tax is due back to the company in the form of a tax refund.

They said some employees will be made redundant in the coming weeks and a small number will continue to be retained over the coming weeks to assist in the orderly wind down of the company’s operations.

They reported they have engaged with the Insolvency Administrator in Germany and the principals of other companies in the group regarding operational issues, inter-company trading and the ongoing fraud investigation.

Alleged fraud

There are further aspects of the alleged fraud carried out by the Wirecard group that directly impact WUKI and will require further investigation, including funds identified as some €390 million allegedly in an escrow account, the existence of which has been questioned by the German administrator, and a €40m payment (loan) to a third party “that is unlikely to be recoverable”, they said.

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WUKI forms part of a group of three companies in Ireland, known as the Irish Wirecard Group (IWG) ,whose sole shareholder is a company ultimately owned by WAG.

WUKI's Dublin office was searched by gardai last July following a request for assistance from the German authorities.

Declan Murphy BL, for the company, previously told the court a statement by WAG to the market last June had referred to monies which the company had thought existed not being there.

That statement said WAG believed there had been a fraud of approximately €2 billion. In the petition, various matters were also set out concerning a suspected fraud on the company.

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