The FT today published the latest piece in its investigation into Wirecard, which raised the prospect of a concerted effort to fake substantial sales and profits at the German fintech, a member of the Dax 30.

It also published some internal correspondence and documents that underpin that reporting, which Wirecard said were fabricated.

So, we thought it would be useful to explain what readers are looking at. We’ll attempt to walk you through the documents, with a digression or two to add context, and introduce some of the characters and concepts.

You can download the full set here, and you’ll want to have read the FT story first.

What do we have, and what are we looking for?

The FT has published six PDFs of emails or email exchanges between members of Wirecard’s finance team.

We’ve also published six spreadsheets that were sent as attachments with those emails, along with the archive of a corporate Skype chat, in which two employees discuss how one of the spreadsheets in particular was created for auditors at EY.

What we are looking for are indications of a concerted effort to inflate sales and profits at Wirecard businesses in Dubai and Ireland.

Business appears to have been attributed to clients that no longer existed in 2017, so a key question is whether payments processing for phantom customers was used to justify sales, profits and asset values reported by Wirecard.

Edo Kurniawan asks for paperwork

First up is an email exchange from December 2016, subject “Revenue Recognition”. Edo Kurniawan sent a Sunday night email to colleagues in Brazil, South Africa, Turkey, Romania and Ireland. (We’ve redacted most of the names.)

Regular readers will recognise Kurniawan as a key figure in FT stories this year. As head of international finance, reporting to Stephan von Erffa, deputy-CFO, he oversaw the accounts for Wirecard’s various businesses in Asia and the Pacific from Singapore. Kurniawan is now a suspect in a probe by Singapore police into potential accounting fraud and money laundering at several Wirecard subsidiaries in the region.

Back in December 2016, Kurniawan was concerned about documenting revenue recognition. Here’s his request:

Hermes, Moip and Provus are Wirecard units in India, Brazil and Romania, respectively. Kurniawan said the request was from an auditor, but also in relation to IFRS 15, an accounting standard on recognising revenue from contracts with customers.

Four days later a reply arrived from Alan White, finance director at Wirecard UK & Ireland. He didn’t have much to offer, but what he did write is important:

The key quotes are:

The data supplied to me for booking on [sic] the majority of the WUKI revenue us [sic] based on the attached files.


I only get a report usually quarterly to book revenue without the back up data to support the calculations.

So let’s turn to the two spreadsheets which were attached to White’s email.

One is “WUKI Payplugger 2016 September”. As you’ll see, the spreadsheet is a little untidy, but appears to record a fairly small business with total revenues so far that year of €819,818 (cell L66).

Much more substantial business is contained in the spreadsheet that White said outlines “Al Alam revenues”. The file is called “Report WCUK-Ireland 07-09.2016”, and here’s the section which totals up revenues, cost of sales and the resulting profit (listed as “margin”) for a three-month period.

(We don’t know why it says “total Q2 2016”, when the months of July, August and September represent Wirecard’s third quarter financial period.)

So what is the source of the €51.6m in revenues? The sheet is titled a “reseller commission invoice”, and it details what appears to be payment processing business for 16 clients. There are monthly figures listed for each client, including net and gross transaction volumes, sales, costs and commission.

Commission, as listed in column AB, appears to be all profit, as it matches margin numbers in the summary table reproduced above.

So we have a relationship with Al Alam Solutions, producing the majority of revenues recognised at Wirecard UK & Ireland, and White not offering any other paperwork to support those figures. The extent of his knowledge about Wirecard’s arrangement with Al Alam or the customers listed is unclear.

Over to Munich

Our next spreadsheet helps flesh out the picture, and is one from which the FT published an extract in May. Here’s the email it comes from:

The FT revealed in May the very large contribution to Wirecard profits from three opaque partner companies, informed by this correspondence.

Kai Oliver Ziztmann was Wirecard’s head of corporate accounting and international reporting, and he refers to an excel file containing “numbers of the third party acquirers”.

‘Acquirer’ is payments jargon for a business that helps a merchant connect to the big payments networks such as Visa and Mastercard. It’s the link in the chain that collects money from card issuers and distributes it to merchants. Here’s a simple explanation from the UK Cards Association.

Wirecard is an acquirer in Europe, but has long said that it uses many partners around the world, for instance in countries where it lacks the appropriate licences itself.

So the set-up appears to be that Wirecard refers business to third-party acquirers, in return for commission on the payments processed. In fact this appears to be the German group’s largest business line: the FT has previously reported that at the start of 2018 “referring” was expected to contribute half of the €2bn in worldwide sales Wirecard forecast for that year.

We’ll come to Zitzmann’s second sentence, and why he sent the file to Kurniawan, in a moment. First turn to the spreadsheet itself “Übersicht Dritt-Acquirer 2017-06-30 Stand 20-07-2017 V1”.

Note, the following pop up will appear when it is opened:

The workbook will try to connect to an internal file system. Click “ignore links” to stop it.

There is a lot of relevant information in this workbook, so stay on the summary page first. Row 1 is the Wirecard entity, and below that in row 2 is the third-party acquirer with which it does business. Here they are, with the profit and loss figures for the fourth quarter and full year in 2016:


Brottovolumen = gross volume
Netto Volumen = net volume
Umsatzerlöse = revenues
Materialaufwand = cost of materials
Ebitda-Effekt = Ebitda effect

And in graphical form, which makes clear the supposed size of Al Alam:

Now find cell E66 on the summary page. The figure for Wirecard UK & Ireland revenues in June to August 2016 exactly matches that in White’s spreadsheet - €51,647,090.20 - indicating a consistency in internal records over time.

Turn to the fifth tab, called “Report WCUK-Ireland 01-03.2017”, and there is another financial report for Al Alam’s business with Ireland, featuring the same customers as in White’s spreadsheet:

The previous tab, called “Q1 2017 Al Alam Card Systems”, has a similar report with financial data for a different set of customers channelled through CardSystems Middle East, Wirecard’s largest subsidiary in profit terms:

These are the 34 customers referred to in the recent FT news report. (Note there are 35 in total, but we did not include Orbitalpay, as the spreadsheets attribute zero business to it.)

When contacted by the FT, 15 of the 34 clients said they had never heard of Al Alam, and of those 15, only four said they did use Wirecard for payment processing at the time. Six of the 34 did not respond to requests for comment or declined to discuss the matter, and five other purported clients could not be traced or contacted.

It’s possible two of those clients were misidentified. is the most prominent “Medline”, but there are more than 1,000 companies with “Medline” in their name in the Orbis corporate database.

“Enterpay” appears to be the Enterpay Corporation in Florida, which was registered in 2014 but failed to make further filings and was placed in administrative dissolution the following year. The Finnish fintech called Enterpay said it had not done business with Al Alam or Wirecard.

There are also seven companies with “Enterpayment” in their name in the Orbis company database. Of those, only a Polish air-conditioning company - which has not responded to requests for comment - appears to have been active since 2015.

Why did Zitzmann send the file to Kurniawan?

An underlying question is what these financial reports were used for. So look at the second sentence in Zitzmann’s email, where he draws Kurniawan’s attention to some of the balance sheet entries in the overview:

The receivables of 31st March 2017 you find line 39; line 40 are the trustee accounts - and we still have a deposit With PayEasy-WDT additional.

On the balance sheet of any company there will usually be a line for “trade receivables”. The figure represents sales that have been recognised in the accounts, but for which the money hasn’t arrived yet.

So the reference to receivables is important for two reasons. One is that it indicates that, as White wrote, that the figures in the internal reports reflect sales booked at the relevant Wirecard subsidiaries.

The second is that growing receivables balances can be an indication of accounting problems. If customers don’t eventually pay for services, or turn out to not really exist, then sales and profits will have to be restated.

Back in 2015 the FT identified what appeared to be a growing receivables balance at Wirecard, obscured by adjustments the company suggested analysts make to its cashflow statement. See the stories here, here and here. Wirecard said at the time that the analysis was based on a misunderstanding, did not reflect reality, and it stood by its published accounts.

Soon after Kurniawan received Zitzmann’s email, he sent a message to Stephan von-Erffa, Wirecard’s deputy CFO. Here it is in full:

The file called “receivables Q2 2017” was attached, which lists substantial debts owed to Wirecard businesses by a dozen companies (maybe keep this image open in a new tab, for reference):

Investors, and the German authorities, may want to understand what made these debts “special”.

A brief-ish refresher on the ‘special’ dozen

ConePay (Maxcone) and Centurion Online Payment International had owed Wirecard Singapore money for years, and are “transactional parties” under investigation by the authorities in Singapore as part of a criminal probe into Kurniawan and five of his Wirecard colleagues.

When the FT’s Stefania Palma paid a surprise visit to the Philippine address listed on the website of ConePay International, she found a confused fisherman, a Wirecard Bank statement, and no evidence of electronic payment processing:

The registered office of Centurion and PayEasy Solutions is a Manilla office that doubles up as the headquarters of Froehlich Tours, a bus and coach rental business owned by Christopher Bauer, a former executive at Wirecard Asia Pacific. (Mr Bauer was also involved with Ashazi Services, a Bahrain company featured early on in the House of Wirecard Series.)

An intriguing response to the FT story about Wirecard’s partners in the Philippines came from Escalion, one of the companies described in the article as a customer of PayEasy.

Escalion is a Luxembourg payments business in the Docler group of companies behind Live Jasmin, a popular webcam site for adults. Safe-for-work illustrative screengrab here:

After publication, Jasmin’s head of marketing got in touch with the FT to say it had no dealings with PayEasy whatsoever:

We are linked directly to Wirecard because they are one of our acquirer banks. There is no other party involved in this and we do not have nor need any other party to process transactions.

Moving on to the rest of the “special” dozen, note that the amounts owed by Goomo, Skilworth and Pakfin were identical as of March 31 and June 30, 2017, suggesting no activity with these customers in the three months between the two dates.

Allied Wallet was a US/ UK payment facilitator, which recently settled US charges that it helped perpetrators to defraud more than $110m from consumers in coaching scams, pyramid schemes and unlawful debt collection operations. The company and its officers settled without admitting or denying the allegations, and Wirecard has said it took appropriate measures when suspicious transaction patterns were noticed.

Allied Wallet’s UK business was placed into liquidation in August, after the Financial Conduct Authority withdrew its authorisation to provide payment services in June.

CAL is the name of the Israel Credit Card Company, controlled by Israel Discount Bank, which in November 2016 settled criminal charges related to allegedly fraudulent processing of payments for porn and gambling sites between 2006 and 2009. We previously wrote about the case when Dietmar Knöchelmann admitted helping ICC-Cal and its then-senior executives commit fraud as part of a plea agreement in Israel.

Strangely, given he was a director of Wirecard UK & Ireland between 2005 and 2009, the offence related to Knöchelmann’s activity at a different, unnamed, payment processor. It’s as if an executive at Deutsche Bank was caught committing a crime while somehow representing another bank.

The €6.6m debt owed by Wirecard Gibraltar to Senjo is curious because Zitzmann’s overview showed no movement in the figure throughout 2016. Wirecard Gibraltar, meanwhile, was placed into liquidation in 2013 but remains listed as a subsidiary of the group, and appears to have had about €50m of retained earnings sitting on its balance sheet for almost a decade.

Where were the auditors?

Take a breath to consider what we have so far. A very large proportion of Wirecard sales and profits appear to have been attributed to a relationship with Al Alam, a payment processor with a small office in Dubai and a minimal web presence. Visa and Mastercard both said they did not license Al Alam.

The documents indicate these profits from Al Alam were routed through subsidiaries in Dubai and Ireland that do not file public financial statements. So investors in a €17bn Dax-30 company have relied on auditors at EY to make sure everything was above board.

“No fuc**ing impairment test is necessary”

Jump to the final set of correspondence, starting with an email to Kurniawan on 6, April, 2018.

The brief message, with two attachments, was sent by Lars Rastede, a member of Wirecard’s German finance team whose title was: manager, mergers and acquisitions.

Rastede explained the use and purpose of the data in a subsequent Skype chat with Kurniawan. The two started by discussing a couple of the companies mentioned above - Centurion and Maxcone (also known as ConePay).

To understand this conversation requires some context. Throughout its history Wirecard has purchased portfolios of customer relationships. These were said to be groups of customers, to whom the group would then sell payments-related services.

Wirecard has tended not to disclose who sells it these portfolios, and its Asian expansion included such deals wrapped up with purchases of obscure payments groups. The very first story in FT Alphaville’s House of Wirecard series drew attention to some of these unusual M&A practices.

At last count the value of customer relationships on Wirecard’s balance sheet was €438m (page 28). Like any such asset, auditors must consider whether the value is fair, or if it should be impaired.

Rastede and Kurniawan’s discussion took place in the final days of EY’s audit of the Wirecard accounts for 2017, and during it Rastede explained the approach to the impairment testing of customer relationships in Munich.

It involved a simple test, he said. If gross profits from the asset were larger than an annual cost, known as depreciation, then the test was passed and “EY has to accept it”, Rastede said:

So long as profits claimed for the customer relationship were large enough, “no fuc**ing impairment test is necessary!”, he said.

Rastede also refers to the “Customer relationship monitoring file” he sent to Kurniawan, the one “with massive effort flowing into it”.

The file, called “Q4 2017 Monitoring CR_intern” is indeed massive, and the FT has redacted large portions of it which were not relevant to issues scrutinised in this investigation.

In it, the tab called “2017 Al Alam” displays a year’s worth of financial data for Al Alam’s relationship with CardSystems. Figures for the first three months of 2017 match those in Zitzmann’s overview spreadsheet.

So the internal financial reports are again consistent, and appear to have been used to justify sales, profits and asset values reported by Wirecard.

The FT’s confidence in the authenticity of these documents was informed by conversations with numerous whistleblowers in multiple countries.


That’s enough for now. We’d invite readers to carry out their own analysis of the documents, and share their conclusions in the comments.

Here are Wirecard’s responses in full:

On July 3, having been asked detailed questions about the nature of its relationship with Al Alam, and how the company could process payments without a relationship with Visa or Mastercard, Wirecard said the FT was relying on fake documents and provided the following statement, via its lawyers at Herbert Smith:

Consistent with Wirecard's strategy to hold own licences or BIN sponsorships globally, Wirecard‘s subsidiaries in Dubai have expanded their capabilities to include issuing and acquiring services in partnership with local BIN-sponsors, enabling Wirecard to offer more products and services regionally without the involvement of other partners in the region. In parallel, Dubai remains one of Wirecard's four major global processing hubs.

On July 18, in addition to accusing FT reporters of market manipulation, Wirecard said:

We reiterate that the information you claim to have is not authentic and we strongly urge you to reassess the quality and intent of your sources.

For confidentiality reasons, reports created for financial accounting purposes usually only present an aggregated view across clusters of clients, partners and processing partners. Detailed customer incorporation data is only maintained in customer relationship management and compliance systems and is rarely represented in internal financial reporting or is masked by aliases. Client and partner clusters can contain hundreds of individual merchants and their composition can vary over time, as for example payment facilitators activate or deactivate individual client relationships.

The Financial Times’ accusation that “monthly transaction volumes and the associated financial data for clients . . . were invented” is false. All customer relationships, including those not processed by financial institutions owned by Wirecard, are subject to regular audits in the annual financial statement audit. Such audits include random test purchases by the auditors at individual clients and the verification of subsequent transaction flows, verifying the integrity of the transaction value chain. We refer to the related key audit matters forming part of the auditors opinions from the respective audit periods.

We strongly reject any allegations of inaccuracy or falsification of reporting by Wirecard’s staff.

On October 10, 2019, the FT asked specifically about sales attributed to customers such as Cymix Prepaid, Molotok and Piku.

The FT also asked why four companies which said they did do business with Wirecard (1XBet, CCBill, Ventnor Enterprise and Allied Wallet), were identified in the files if, as Wirecard said, customer incorporation data is routinely masked by aliases.

Herbert Smith said:

It is wholly unclear what you intend to achieve by continuing to approach our client with such questions, in circumstances where our client has told you time and time again (since at least June 2019) that it does not believe the document to be authentic and where you have refused to provide any evidence to support your bare assertion to the contrary. What is clear is that your conduct, in so doing, continues to fall short of the standards of responsible journalism.

The company reiterated the above points October 14, adding that “customers usually contract and connect only to Wirecard, which acts as a platform to integrate the services of the various parties involved in the payment value chain.”

Al Alam said it does not comment on individual partner or client relationships. It also said:

We of course operate in full accordance with all applicable laws, rules and regulations, and we operate on sound commercial business practices.

Al Alam was not involved in any alleged process to fake revenues or profits at Wirecard.

EY declined to comment, citing client confidentiality.

Copyright The Financial Times Limited 2023. All rights reserved.
Reuse this content (opens in new window) CommentsJump to comments section

Follow the topics in this article


Comments have not been enabled for this article.