Wirecard board expected to quit as administrator appointed
Munich court likely to announce on Tuesday it has formally taken next step to start insolvency proceedings
Wirecard’s chairman is expected to resign with the rest of its supervisory board as early as this week, leaving the collapsed German payments company to be broken up and sold by the administrator.
A Munich court is likely to announce on Tuesday that it has formally appointed the administrator to start insolvency proceedings at Wirecard, an important step that transfers power away from the company’s directors to the administrator.
Thomas Eichelmann, who joined the Wirecard board last year and took over as chairman at the start of this year, is expected to respond by announcing that the five-person supervisory board has resigned, according to two people briefed on the matter.
Wirecard, which was worth as much as €24bn at its height, collapsed into insolvency in June after the revelation of one of postwar Germany’s largest ever accounting frauds.
Munich-based lawyer Michael Jaffé was appointed interim administrator at the start of July and has been working since then on preparing the company to be dismantled.
Wirecard’s supervisory board has not been paid since its insolvency filing and once its members lose their decision-making power, they are likely to decide that it is time to quit, the people said.
They added that the administrator is expected to conclude in its initial report to the Munich court that there is little chance of keeping Wirecard going as a single entity and that the best option is to break it up and sell it in pieces.
After the discovery that about €1.9bn in cash was missing from Wirecard’s accounts and large parts of its Asian operations were a sham, there is likely to be a rush of lawsuits against the company’s directors and EY, its auditors.
Wirecard’s management team has already been turned upside down by the scandal. Markus Braun, its former chief executive, and three other former top managers are in custody. Mr Braun denies allegations of fraud and embezzlement. Jan Marsalek, Wirecard’s former second-in command, is on the run and wanted by police.
It is unclear whether the remaining members of the executive team will also quit when the administrator is formally appointed. James Freis was initially hired from Deutsche Börse to become Wirecard’s chief compliance officer in July, but after the scandal erupted he was chosen as an emergency replacement for Mr Braun as CEO on June 19.
The other two members of the management board have been at Wirecard much longer. Alexander von Knoop, joined the company in 2005 and was made chief financial officer in 2018. Susanne Steidl joined in 2006 and has been chief product officer since 2018.
Last week, Wirecard’s UK business agreed to sell much of its technology, staff and clients to Railsbank, a UK start-up backed by Visa. The administrator has also agreed to sell the payment company’s Brazilian offshoot and it expects to receive final bids shortly for Wirecard North America, formerly Citigroup’s Prepaid Card Services business.
Among the company’s supervisory board members is Wulf Matthias, a 75-year-old former Credit Suisse private banker who was chairman of Wirecard for almost 12 years before handing over to Mr Eichelmann at the start of this year.
The second-longest-serving member of the supervisory board is deputy chairman Stefan Klestil, who joined the board in 2009. The other two members — Vuyiswa M’Cwabeni and Anastassia Lauterbach — joined in 2016 and 2018, respectively.
Wirecard, its administrator and Mr Eichelmann all declined to comment.