German financial and payments company Wirecard has filed a lawsuit against the Financial Times for a series of articles the news organization wrote alleging misconduct and fraud in its accounting, Reuters reported.
The suit was filed on Thursday (March 28) at the Munich regional court in Germany, and named both the FT and the reporter who wrote the stories, Dan McCrum. Wirecard would seek compensation if the suit is successful.
“Our objective is to seek a halt to the incorrect use of business secrets for the purposes of reporting, as well as damages,” Wirecard said in a statement.
The basis of the articles was a whistleblower at Wirecard who said the company’s Singapore office was engaged in faulty accounting. After the articles came out, Wirecard’s value tanked and the company lost billions in value. Singapore police also started an investigation.
The company fired back in response to FT’s articles, saying the reporting was “false, inaccurate, misleading and defamatory.”
On Monday (March 25), Wirecard said an outside investigation by law firm Rajah & Tann found that the office in Singapore might have committed some crimes, but that the German office wasn’t part of it.
“The review … did not reveal findings of criminality in respect of the headquarters of Wirecard,” the company said. “Criminal liability may, however, be attributable to individual local employees in Singapore, according to local law.”
As Wirecard pointed out, “The independent review had no findings of round-tripping or corruption.” The company’s shares climbed 30 percent on the news of the report.
“This underpins our view that the whole negative stance from FT was exaggerated, and once more created a strong buying opportunity for fundamental investors,” said Hauck & Aufhaeuser Analyst Robin Brass about the investigation.
Wirecard plans to delay the release of its 2018 annual report until April 25 in order to add the law firm’s account.
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