Wirecard NZ enters administration

Wirecard NZ — the fully-owned subsidiary of the scandal-plagued German payments group — was yesterday placed in voluntary administration.

McGrathNicol partner Andrew Grenfell, who has been appointed voluntary administrator, told the Herald, “It’s business as usual”, for around 20 Auckland-based staff. He hoped to find a buyer. Overnight, BDO partners Andrew Fielding and Nicholas Martin were appointed administrators of Wirecard Australia, whose clients include Westpac Australia.

Grenfell said he was working with his opposite numbers across the Tasman, and a sale of both businesses was possible.

It was also possible that Wirecard NZ could be sold standalone.

Grenfell said Wirecard NZ was set up differently from the rest of the group. It is a software licensing business, not transactional. It was possible it could be sold separately.

“It’s a good business,” Grenfell said. Voluntary administration was necessary because of costs and liabilities imposed on Wirecard NZ by the rest of the group at a time when financial support had been withdrawn.

Founder arrested

Wirecard’s founder Markus Braun was arrested last month on suspicion of false accounting and market manipulation, two days after the payments group admitted €1.9 billion ($3.32b) of cash reported on its balance sheet likely never existed.

The group’s shares have collapsed from €140.90 to €2.44 since the revelation and later statements that previous financial statements might be inaccurate.

Wirecard NZ losses

Wirecard NZ has yet to make public its financial statements for the December 2019 year but did file its 2018 accounts to the Companies Office in March this year.

Those statements showed the firm made a loss of $8 million in 2018, worse than the $1.2m loss reported the previous year.

The accounts stated that Wirecard NZ was dependent on continued support from its parent company — including a €10m letter of support for five years beginning April 2019.

A note under the heading “subsequent events” highlighted a court dispute with an Australian company that it was defending and a recapitalisation event in December 2019, whereby the German group increased the New Zealand company’s share capital by €7.51m.

Wirecard NZ used this to settle “all outstanding loans” with Wirecard Technologies GmbH, the note said.