Liquidators to Irish arm of Wirecard are named
Assets of Wirecard UK and Ireland have slipped to €6.7m, court hears
THE High Court has appointed joint official liquidators to the Irish arm of failed Munich-based electronic payments provider Wirecard AG, which 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 €556.5m to some €6.7m with the net liabilities estimated around €83m, the court heard yesterday.
Wirecard AG (WAG) filed for insolvency earlier this year, owing creditors €4bn after disclosing a €1.9bn hole in its accounts that its auditor EY said was the result of a sophisticated global fraud.
On October 28 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.
When the petition returned before Mr Justice Brian O’Moore yesterday, 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 suspected fraud, the judge said he would be “reticent” in his remarks.
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 €556.5m to a net realisable value of some €6.7m. The management accounts also provided for liabilities of €87.6m with an adjusted liabil
ity of some €83.2m after set off intercompany balances.
The liquidators reported they are prioritising the possibility that €43m 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 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.
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 €390m 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.
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 in July following a request for assistance from the German authorities.