German payments processer Wirecard forged client data in its efforts to secure €900m (£760m) in investment from Japanese conglomerate SoftBank, as it sought to reassure investors about the fundamentals of its business before it collapsed the following year.
The Bavarian fintech firm showed SoftBank’s representatives a fabricated list of clients on a computer in Wirecard’s Munich headquarters, after the Financial Times cast doubt over the payment’s processors reliance on obscure Asian business partners for almost all of its operating profit and half of its total revenues.
The forgery came after SoftBank asked to see Wirecard’s client data as part of its due diligence process into the German firm, after the Japanese investor’s suspicions were raised by the FT’s reports, according to sources speaking to the Financial Times.
Although Wirecard initially refused to show SoftBank its client list, claiming confidentiality, the firm later invited representatives from the Japanese investor to come and view a forged list on a computer in its Munich headquarters, as it sought to seal the deal in its bid to cast aside the FT’s claims.
The Japanese investment manager later invested €900m into Wirecard, after it was reassured by the fake client list, that had been forged using genuine client data from Wirecard’s European operations by the Munich firm’s second-in-command.
SoftBank’s investment later helped Wirecard raise another €500m in debt, before the firm collapsed in 2020, following the discovery of a €1.9bn hole in its balance sheet.
Wirecard chief executive Markus Braun and two of the company’s other ex-managers are now likely to face a trial later this year. Braun denies all wrongdoing, while Wirecard’s former head of accounting Stephan von Effra has previously admitted forging documents in an isolated incident, during a special audit by KPMG.
SoftBank and Wirecard have been approached for comment.