Singapore orders Wirecard to stop services, return customers funds

SINGAPORE: Singapore’s financial regulator ordered Wirecard AG’s local entities to cease their payment activities and return all customer funds by Oct 14.

The local unit of the embattled German payments company informed the Monetary Authority of Singapore that it’s unable to continue providing payment processing services to “a significant number of merchants,” MAS said in a statement on Wednesday.

“MAS has assessed that it is in the interest of the public for Wirecard SG to cease its payments services and promptly return all customers’ funds,” it said.

“This provides the greatest certainty to customers on their appropriate course of action, including seeking alternative service providers.”

Wirecard filed for bankruptcy in June after acknowledging that US$2.2 billion it had listed as assets didn’t exist, triggering a global investigation.

Singapore is home to Wirecard’s Asia Pacific headquarters and the company had been expanding aggressively in the region, which accounted for almost 45% of the group’s reported revenue in 2018, second only to Europe.

Insolvency

While Wirecard’s Singapore unit isn’t part of the insolvency proceedings, its insolvency administrator Michael Jaffe has mandated advisory firm FTI Consulting to help with the planned sale of the local unit, Bloomberg reported this month.

Credit card payments at merchants using Wirecard SG’s services, as well as usage of prepaid cards issued by the firm will be affected by the regulator’s order, MAS said.

In the city state, the fintech firm is facing probes by MAS, the local accounting authority and the police’s financial-crime unit.

Last year, Singapore police raided Wirecard’s local offices after an employee alleged that a member of the company’s finance team engaged in accounting breaches.