Wirecard Scandal Deepens As Company Says Missing $2 Billion Likely Did Not Exist

German credit card issuer Wirecard AG on Monday revealed that it concluded there was probably no €1.9 billion ($2.1 billion) that was supposed to be held in two accounts, after all, escalating the scandal that led to the payment group's chief executive's resignation last week.

Wirecard was once considered a star of the growing financial technology landscape, but the company's shares fell sharply after multiple Financial Times reports on accounting anomalies in its Asian operations became the focus of the paper. Wirecard denied the claims, which started in February 2019, and stated that it was the victim of speculations.

The German "poster boy" of credit cards is conducting emergency meetings with its key lenders, which are owed approximately 1.75 billion euros, to prevent a possible financial collapse sparked by the missing funds.

The incident marks a dramatic twist in the wealth of a local tech group that attracted some of the most influential investors in the world before a whistleblower alleged that Wirecard owed its success in part to a network of bogus dealings.

Last week, the German payments firm disclosed that auditor EY had refused to sign off the company's 2019 accounts as it could not verify the existence of 1.9 billion euros in cash balances in trust funds, about 25 percent of its total balance sheet.

Shares of the company are in free fall anew on Monday after it revealed it was possible that 1.9 billion euros (2.1 billion dollars) of cash from its balance sheet actually did not exist. 

The Munich-headquartered firm divulged it was evaluating the possibility that unaccounted cash balances flagged by EY auditors last week did not exist. Shares of Wirecard plunged around 15 percent moments after the opening bell. Its stock price last traded down at 36 percent.

Wirecard announced on Monday that it has terminated its chief operating officer, Jan Marsalek, whom the company previously placed under suspension. Last week, Wirecard former chief executive, Markus Braun, quit.

Two major banks from the Philippines that were said to hold the funds in escrow accounts announced they had no relations with Wirecard.

BDO Unibank revealed that a document claiming the existence of a Wirecard account was altered and carries forged signatures of bank officers. The Bank of the Philippine Islands stated a document that claims Wirecard was a client was spurious.

Meanwhile, as Bloomberg reported on Monday, at least one banking group is considering to write off around $90 million lent to Wirecard. The lender, the Bank of China, is one of over a dozen commercial banks that all told have released $2 billion through a facility to the beleaguered German payments group.