Grab Puts Brakes On Payments Agreement With Wirecard

After auditors for Wirecard couldn’t confirm the existence of $2.1 billion in trust accounts and Wirecard’s former chief executive was arrested, Southeast Asia’s Grab has reportedly halted a collaboration with the German payments company.

“We have not begun business integration work on the Wirecard partnership and we are pausing the partnership till further notice,” a representative from Grab told Reuters.

Wirecard had reportedly not started to enroll retailers or started processing payments for the ridesharing and payments firm. In March, Wirecard and Grab had come to a deal where Wirecard was to start handling GrabPay eWallet transactions beginning in areas inside of Singapore, the Philippines and Malaysia.

As it stands, over 600,000 retailers and small businesses take Grab’s eWallet for payment. The Monetary Authority of Singapore requested that Wirecard store client money that comes out of local operations in the financial institutions of the nation.

The news comes as  Markus Braun, the former chief executive of Wirecard, was arrested on June 22. The executive surrendered to prosecutors following a warrant issued by a judge.

Braun encountered charges of account fraud and market manipulation allegedly created to artificially boost the balance sheet of the FinTech to make it appear more attractive to clients and investors.

On June 18, news surfaced that Wirecard had delayed publication of its 2019 annual report after finding that its auditor couldn’t confirm that $2.1 billion in trust accounts — or roughly a quarter of the value on the firm’s books — exists.

Wirecard disclosed in a statement at the time that Ernst & Young told the company that “no sufficient audit evidence could be obtained” to confirm that the funds, in fact, were really there.

Wirecard said, “There are indications that spurious balance confirmations had been provided from the side of the trustee respectively of the trustee’s account holding banks to the auditor in order to deceive the auditor and create a wrong perception of the existence of such cash balances or the holding of the accounts for the benefit of Wirecard group companies.”