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McKinsey warned Wirecard About “risks related to business partnerships or third parties.”


McKinsey warned Wirecard greater than a year earlier than the fee group’s collapse that it ought to take “immediate action” to cope with an absence of controls at its largest enterprise.

The consultancy advised the corporate in June 2019 that “risks related to business partnerships or third parties” have been considered one of its fundamental vulnerabilities, in accordance to two individuals briefed on the main points and a doc seen by the Financial Times.

The third-party enterprise, later uncovered as a sham, was mentioned to perform funds processing on Wirecard’s behalf in nations the place it lacked licences to do the work itself. It accounted for half of the group’s reported revenues and all of its working revenue.

Last month Wirecard filed for insolvency after disclosing that the outsourced operations had been misrepresented to shareholders and that €1.9bn in money linked to the operations most likely did “not exist”.

The McKinsey evaluation, which was collectively commissioned by the administration and supervisory boards at Wirecard, exhibits that compliance shortcomings have been highlighted internally greater than a year earlier than the corporate acknowledged that a huge fraud had taken place.

Later, in August 2019, McKinsey gave a full presentation to the 2 boards at an off-site assembly in Austria, the place it warned that “non-existent” controls over the third-party enterprise had created a “significant risk”.

McKinsey was employed after the Financial Times reported in April 2019 that Wirecard relied closely on three opaque accomplice firms in Asia to perform funds processing on its behalf.

The compliance audit by McKinsey was one of many first initiatives of Wirecard’s danger and compliance committee, which was based in March final year and chaired by Anastassia Lauterbach, a McKinsey alumna.

Ms Lauterbach was appointed to Wirecard’s supervisory board in mid-2018 alongside Susana Quintana-Plaza, then a accomplice at Siemens’ enterprise capital arm Subsequent47. They joined a board dominated by males who had supervised the corporate for a decade.

The McKinsey evaluation was completed by the top of June 2019 — 4 months after Wirecard’s then chief govt Markus Braun advised analysts on a convention name that the corporate’s compliance was “perfect”.