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Meanwhile Mastercard and Visa, like all large financial institutions which survived the crisis, faced pressure to know more about who they did business with because weapons of financial mass destruction had detonated inside Lehman Brothers and other banks for a simple reason: they got involved with people and products they didn’t really understand.
‘Faking profits, you end up with a problem of fake cash. At the end of the year the auditor will expect to see a healthy bank balance, it’s the first thing they check. So what you have to do is spend that fake cash on fake assets,’ he said. Imagine the auditor opens the treasure chest and finds it empty. We spent the gold on that building at the top of the hill, you say, handing them a telescope. So long as the accountant doesn’t walk up there and discover the house is just a wooden façade (or, indeed, get on a flight to Bahrain), everything is fine.
As soon as the blog was posted the Wirecard share price crashed, wiping more than €1bn off its stock market value. A sinking feeling set in. Perhaps I had been a little hasty. The rule is a simple one – if you think Should we run this by the lawyer? then you already know the answer.
The sun was shining and we hung out for a while reflecting on what a crazy few months it had been. ‘I dunno, man. At this stage I’d have to catch Markus Braun at a paedo party with Harvey Weinstein for anyone to care,’ he said.
‘And did you take up his offer?’ Nonplussed, I took a beat to realize. ‘Did I personally short Wirecard, while a suspect in a German market manipulation investigation and as I was continuing to report on the company? No, I didn’t do that.’ Did I have to say this out loud? Reporters can’t trade stocks.
The questions were sent to Wirecard on the evening of Thursday, 10 October, without any deadline for comment. First thing on Monday morning I chased for the responses ‘without delay’. They arrived that evening and we were ready. Lionel Barber’s instructions had been clear. ‘I want us to draw blood. I want an Exocet missile. I want them dead.’ On Tuesday, 15 October we took aim and fired.
‘management believe that trust accounts held in third-party acquiring business is cash equivalent, part of operating cash flow and not restricted.’ To put it another way, Wirecard was leaning on the bonnet of a Bentley. When the auditors asked to see the keys it pointed to a friend across the street who held them up and gave them a jangle. ‘Don’t worry, we can take it for a drive whenever we like.’
