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Chris Hohn, head of $24 billion fund TCI, said in an open letter to Wirecard’s supervisory board that the audit by KPMG raised questions over management’s compliance with anti-money laundering and know-your-customer laws.
“We are of the view that the supervisory board is legally obliged to intervene,” Hohn wrote in the letter, addressed to Wirecard Chairman Thomas Eichelmann and other supervisory board members.
“In our opinion, the necessary intervention is now to remove the CEO from all management duties.”
Wirecard shares, which lost 26% on Tuesday following the release of the KPMG audit, shed a further 6% on Wednesday.
German financial regulator Bafin said it would include the findings of the KPMG audit in its ongoing investigation into suspected market manipulation in Wirecard stock.
“At present, we are still investigating whether Wirecard may have withheld information that is subject to disclosure rules or may have provided incorrect information,” Bafin said in a statement.
Wirecard did not respond to emails and phone calls requesting comment from Eichelmann and Braun.
Braun told reporters and analysts on Tuesday that the KPMG audit had found no incriminating evidence to indicate that Wirecard’s accounts had been manipulated, nor would it restate its accounts for 2016 through 2018. He is the company’s largest shareholder.
Wirecard hired KPMG last year to address a series of allegations by the Financial Times and others, including that it had booked half of its worldwide revenues and much of its profits from three obscure third-party acquiring partners.
In his letter, Hohn noted that KPMG had not been able to verify the existence of 1 billion euros ($1.1 billion) in cash payments by the third-party acquirers.
Nor could the beneficial owner of a counterparty in an Indian asset deal struck in 2015 be identified, he said, which would have been a necessary part of due diligence.
“Wirecard operates a banking license in Europe and is strictly regulated as a payments service provider; in our view it has to abide by applicable Know Your Customer and anti-money laundering laws,” Hohn wrote.
“This raises questions as to how it is possible to comply with these regulations if Wirecard either does not know or will not disclose who its customers are.”
TCI has disclosed a short position in Wirecard of 1.04% of shares outstanding.
