Exchange operator Deutsche Boerse will be removing Wirecard from the DAX index of leading German blue-chip stocks following a rule change, signaling another blow for the disgraced payments company, Reuters reported.
The new rule change makes it so Deutsche Boerse can remove firms due to insolvency. The rules were first proposed last month, and the new composition of the DAX will debut Aug. 19 and take effect after market close on Aug. 21, which will be Wirecard’s last day on the index.
Wirecard had been on the index since 2018, when the company was a rising star of the European tech scene. It displaced Commerzbank on the list of the top 30 companies.
But times have changed. Earlier this year, a scandal erupted over missing payments in the company’s annual report, which has blossomed into a worldwide money laundering scheme that has seen numerous arrests of high-profile officials, including CEO Markus Braun, and the loss of status for Wirecard in almost every way.
The company filed for insolvency in June.
The scandal also widened quickly to involve several auditors and regulators, who allegedly knew about Wirecard’s unusual methods of moving money and continually gave the company the OK to keep operating.
New details about the scandal have continually come out over the past several months. For instance, in early August it came out that top Wirecard officials may have raided their own company’s funds earlier this year in anticipation of the company’s downfall, and deposited $1 billion in partner companies. Sources said the deposits were in the form of unsecured loans, which the company said at the time were intended to pay off partners in Dubai, Singapore and the Philippines.
The company’s lenders are also in trouble due to the company’s insolvency, now on the hook for hundreds of millions of euros due to Wirecard’s inactivity.
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