Wirecard : statement on Financial Times article

12/19/2019

Wirecard's statement on Financial Times article

Today's article by the Financial Times only reiterates old allegations, which were the subject of multiple independent audits before and have proven to be unsubstantiated.

In October 2015, Wirecard made an acquisition in India, which included the acquisition of India's leading retail-assisted e-commerce network as well as a majority stake in India's number one domestic (IMPS) remittance service provider at the time, a licensed Prepaid Payment Instrument (PPI) issuer.

Wirecard had conducted a stringent due diligence of the acquired assets. Applying industry standard valuation models, the acquired assets' valuation ultimately reflected the growth potential of the Indian payments industry and the companies' unique position in the Indian market. Not only did the acquired assets hold all the regulatory licenses required for Wirecard's expansion into the Indian market, but also included India's leading domestic remittance operator, touching more than 100,000 retail partners and millions of consumers across all of India every day.

At the time, the market showed a strong upwards trend in digital payments company valuations due to the tremendous growth potential of India's payments industry. This trend persists until today. Other assets we looked at on the Indian market at the time were valued in a range of $500 million to $1.5 billion yet showed neither profitability nor any clear path to overall corporate profitability.

At the time of signing its acquisition in India in October 2015 Wirecard was not holding any information on the purchase prices paid to previous shareholders of the acquired assets in preceding share transactions not involving Wirecard.

Hermes, one of the companies acquired by Wirecard in India, historically also operated an online travel agency business, which was not acquired by Wirecard. The online travel agency business was retained by EMIF1A, a Mauritian investment fund and prior shareholder of Hermes, and merged with Orbit Corporate Leisure Travels (Orbit), another acquisition of EMIF1A.

Wirecard is still the payment service provider for Orbit's online travel agency services. The commercial terms of the payment and retail distribution services provided by Wirecard to Orbit are standard industry terms. The revenues generated by and the legitimacy of the business relationship between Orbit and Wirecard are fully audited as part of Wirecard's annual audit and were verified as part of a separate independent forensic review.

The Indian market has the potential to be one of the strongest growth markets for digital payment in the next 10 years. Wirecard is perfectly positioned to strongly benefit from this growth.

We note that the publication of the article by the Financial Times coincides with the 'Triple Witching Day' tomorrow, one of four expiry dates a year on instruments such as options, futures and of stocks.