Featured News Opinion Singapore played key role in exposure of Wirecard scandal: Documentary

Singapore played key role in exposure of Wirecard scandal: Documentary

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"... but that required it to hire Singaporean professionals such as... a lawyer of integrity whose decision to blow the whistle ultimately led to the unravelling of the entire fraud.”

Singapore played a pivotal role that enabled Financial Times to expose Germany’s biggest accounting scandal involving Wirecard, a German digital payments firm. Starting as a company which processed payments for gambling and pornography, Wirecard grew to be one of the most valuable companies listed on the German stock exchange DAX, worth over €20 billion (S$28.6 billion) at one time. After the Financial Times exposed fraud in Wirecard, the company filed for insolvency in 2020.

“Singapore was essential because it was Wirecard’s headquarters for the whole Asia-Pacific region. It was in a sense trying to ‘go legit’ with its purchase of Citi’s payment processing operations, but that required it to hire Singaporean professionals such as… a lawyer of integrity whose decision to blow the whistle ultimately led to the unravelling of the entire fraud,” Dan McCrum told The Independent Singapore by email.

McCrum, who is based in London, and Stefania Palma, who was the Financial Times correspondent in Singapore from June 2018 to August 2021, were the main journalists of the British newspaper that covered the Wirecard scandal.

Because Wirecard initially refused to admit wrongdoing shortly after Financial Times exposed the company’s shenanigans in Singapore, Financial Times persisted with the Wirecard story, which resulted in more revelations later, said McCrum in the UK via video during a screening of the Netflix documentary, “Skandal! Bringing down Wirecard”, at the Hong Kong Foreign Correspondents’ Club on January 16.

In June 2020, Wirecard admitted €1.9 billion, which was missing from its accounts might be non-existent. A few days later, the firm filed for insolvency. Currently, Wirecard’s former chief executive officer Markus Braun and two other former Wirecard executives are on trial in Munich, Germany, on fraud charges.

In the documentary shown at the Hong Kong Foreign Correspondents’ Club, McCrum described a breakthrough in his coverage of Wirecard. He said, “Sort of one Monday morning in October (2018), I get this funny email from Singapore… And so I get in touch with Stefania Palma in Singapore.”

In the documentary, Palma said, “In Singapore, Wirecard was just absolutely pervasive. Thousands of shops, and merchants, and hotels were using Wirecard’s card machines. Dan became aware that there was a potential whistleblower who had a lot of information and was very keen to speak to us as soon as possible. The first meeting was at Changi Airport. Going in, I knew very little of who I was meeting. I was definitely very cautious. I found out his real name… He’d been the head of legal for Asia at Wirecard. He had recently left the company and was full of frustration and anger in terms of what he had witnessed. It was an extremely intense conversation that lasted hours. I realized the overwhelming volume of information that he had. I immediately gave Dan a call and said, “This could be immense for us.””

McCrum said in the documentary, “Okay. Holy s**t. This sounds like the real deal. I think I need to come to Singapore.”

After meeting the whistleblower in Singapore in late 2018, McCrum returned to London with a huge trove of information obtained from the whistleblower.

In October 2018, the whistleblower had just been forced out of Wirecard, after senior executives stonewalled an internal investigation into fraud allegations, reported the Financial Times on May 20, 2021. The efforts of his mother to contact the Financial Times set in motion a chain of events that exposed the German company as a house of cards, forced reform of the country’s institutions and hurt the reputation of EY, a Big Four accounting firm which audited Wirecard, the Financial Times story said.

While working for Wirecard in Singapore, the whistleblower conveyed his suspicions of problems within the company to its senior management in Germany, who put its then-chief operating officer Jan Marsalek in charge of the matter related to the documentary. That was like putting the fox in charge of the chicken coop. Ironically, Marsalek is now on the run from German prosecutors.

Although Marsalek’s whereabouts are unknown, the Austrian man is suspected of having fled to Russia with the aid of Russian spies, McCrum told the Hong Kong Foreign Correspondents’ Club. Marsalek had ties to Russian and Austrian intelligence, McCrum added. The characters in this real-life saga included a former Libyan head of foreign intelligence named Rami El-Obeidi, a former official of the Austrian Interior Ministry named Wolfgang Gattringer, an Austrian brigadier and Colonel Andrey Chuprygin who was a former Russian secret service officer, according to the documentary.

At one time, half of Wirecard’s revenues and nearly all its profits came from three opaque partner companies, Al Alam Solutions in Dubai, PayEasy Solutions in the Philippines and Senjo Group in Singapore, reported the Financial Times on April 24, 2019. The documentary showed Palma flying from Singapore to the Philippines and then travelling by car to look into the Philippines company. When she arrived at the address of this company, she found a house in the countryside with a few dogs and some rural folk, not befitting the office of a major corporation.

Two banks in the Philippines where €1.9 billion of purported Wirecard money was supposed to be deposited said they had no business relations with the payment processor, the documentary related. This revelation led to the collapse of Wirecard.

At the club screening, McCrum said he was happy with the actions of the Singaporean authorities over the Wirecard case.

Following investigations by the Commercial Affairs Department (CAD) of the Singapore Police into two Singapore subsidiaries of Wirecard, namely Wirecard Asia Holding (WAH) and Wirecard Singapore, three former employees of WAH and Henry Yeo Chiew Hai, a director of another Singapore company called Jacobson Fareast Marketing Services, were charged in a Singapore court on August 17, 2022, the Singapore Police announced on August 17, 2022. Between May and December 2018, these four people allegedly conspired with Edo Kurniawan, the then Vice President of Controlling and Finance of WAH, to misappropriate various amounts between SS$41,200 to $100,000 from WAH, the Singapore Police added.

On May 5, 2022, the Singapore Police announced the CAD and Monetary Authority of Singapore (MAS) were investigating Citadelle Corporate Services, Senjo Group and its subsidiaries for suspected falsification of documents. A current or former director of Citadelle, R Shanmugaratnam, was charged with falsification of documents for allegedly issuing 14 letters from Citadelle to Wirecard, its subsidiaries and an audit firm that falsely represented that Citadelle held large sums of money in its escrow accounts when Citadelle did not maintain such accounts, said the Singapore Police announcement of May 5, 2022.

In September 2021, a British man, James Henry O’Sullivan, was charged with abetting Shanmugaratnam in falsifying some of the abovementioned documents, the Singapore Police added. On May 5, 2022, O’Sullivan was charged in a Singapore court with two additional counts of abetting Shanmugaratnam in falsifying documents, the Singapore Police disclosed.

The documentary featured a meeting in London between several men, including one disguised as a sheikh and a British short seller, Nick Gold, who told them the Financial Times was about to publish a negative story on Wirecard. The conversation was secretly recorded and passed to the German press, which ran stories portraying the Financial Times as corrupt in colluding with short sellers by publishing negative stories on Wirecard to drive down the company’s share price.

In April 2019, the Germany Financial Supervisory Authority, BaFin, filed a criminal complaint against McCrum and Palma, but the case was dropped in late 2020. In November 2020, McCrum was the first non-German business journalist to win the Helmut Schmidt Journalism Prize in Germany for his reporting on Wirecard.

Toh Han Shih is the chief analyst of Headland Intelligence, a Hong Kong risk consulting company.


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