Wirecard 2014 - 2025

The strange case of Ashazi: Wirecard in Bahrain, via Singapore

Dan McCrum  











|  May 05 10:10  |  3 comments  |                          Share










 

Ashazi Services, a Bahrain-based electronic payments company, moved from place to place in the Gulf Kingdom. For a time it was based in managed office space in one of the gleaming towers of Manama’s prestigious diplomatic area, but also small apartments far from the centre.

In early 2011, however, Ashazi’s address was the office of its lawyer, Kumail Al Alawi, found above a side alley tucked between an outpost of Kentucky Fried Chicken and a car rental office.

So what sort of company was it? The question matters because in 2011 the Bahrain start-up was responsible for €4m per year of licence fee revenues reported by Wirecard, the German listed payments company. Ashazi Services Co WLL is one of the dormant companies leading back to E-Credit Plus Singapore, the first business purchased in Wirecard’s long Asian acquisition spree.



Wirecard is a German-listed tech company worth €4.8bn, and a stock market rocket whose shares have risen eightfold in the last six years. It owns a bank and listed in Frankfurt through the 2005 reverse takeover of a defunct call centre operator. And, as outlined in our first post on the matter, the company presents a puzzle.

Since 2009 the company has struck a string of deals, often involving struggling companies, to buy customers for its payment services. Wirecard structured some of those deals in unusual ways, and has raised half a billion euros from investors to keep spending. The tactics prompt questions about what was bought, the nature of its growth and the value of €670m of intangible assets on the balance sheet.

Wirecard said:


In addition to a strong organic growth story in Europe, Wirecard started in 2009 a very successful expansion strategy into Asia. This expansion strategy is focusing on a “buy and build” strategy. By M&A Wirecard buys into local payment companies which are small in international terms but have local strengths, Wirecard contributes its international expertise and business is developed on a synergetic basis.

The Asian expansion began with Singapore-based E-Credit Plus PTE ltd. This post is a look at that deal, and some of the company’s customers.

Searching for Ashazi

We visited Mr Al Alawi at his new office by a highway, the neighbouring buildings under construction. A bookshelf was filled with thick ring binders named for different clients, but the slim black folder marked “Ashazi Services” the lawyer pulled down held only a handful of documents. Nasreen Sururi, Ashazi’s, owner and managing director, would be better placed to talk about the company, he suggested.

Ms Sururi started Ashazi in 2009 with minimal capital, according to the Bahrain Ministry of Industry and Commerce, which shows no record of annual financial statements filed since. In December 2011, discussing her nomination for an award at the Abu Dhabi Women In Leadership forum, she told Bahrain This Month her company had “operations in Bahrain, Kuwait and the United Kingdom, and endeavours to maintain a growing global network of partners worldwide”.

According to Companies House, Ashazi Services (UK) ltd was a dormant entity, since dissolved. It was owned by an Isle of Man company controlled by accountants based in the Channel Islands.

As for the global partners, in January 2012 Ashazi issued a press release announcing a strategic partnership agreement with hSenid Software International, a Sri Lankan company with offices around the world. “Under the terms of the agreement Ashazi will become the exclusive partner and agent for hSenid’s products in the Kingdom of Bahrain and will integrate its mobile payment products with hSenid’s mobile platform.” Another release in March elaborated on the collaboration.

However Dinesh Saparamadu, hSenid’s chief executive, had never heard of Ashazi before we asked, and said his company anyway did not have an exclusive partner and agent for Bahrain. “We haven’t done any work with this company and we don’t have any partnership with them.”

Ashazi’s website, now for sale, appears to have been short lived in fully functional state, according to the Internet Archive. An October 2010 snapshot of the website, the earliest available, appears to show a site under construction.

A valuable Wirecard customer

From August 2010 Wirecard began licensing software to Ashazi at a cost of €1m per quarter, according to accounts filed in Singapore by E-Credit Plus. A note to the accounts said the software was provided by Wirecard, passing through at no profit to the Singapore entity.



Did Ashazi pay those bills? At the end of the year E-Credit Plus reported licence fee receivables — sales recognised, but where cash is yet to be collected from customers — of S$3.5m (€2m).

The following year E-Credit Plus, renamed Wirecard Asia Pte ltd, reported licence fee income of S$7.2m ($4m), and licence fee receivables of S$6.1m (€3.6m). The high level of uncollected cash prompted the local audit firm to offer a qualified opinion on the accounts, issued June 15 2012.



For 2012 the auditor was changed to the local branch of Ernst & Young, and licence fee revenues were shifted to another subsidiary, E-Payment Singapore, also audited by E&Y. The 2012 accounts for E-Payment Singapore show revenues of $7.2m, licence fee income of S$6.4m, and trade receivables of $6.5m.

When we first reached Ms Sururi, we asked if she recalled the agreement with E-Credit.

“No, [pause] no”, she said. “I cannot recall anything. As you say, I cannot recall what I had for lunch. Literally I forget everything in my files.”

“I had a partner in the company and he used to agree all the contracts”, she said. “I was running the company more on the management and marketing side”. She asked to be sent details of the agreement by email.

Wirecard said:


Ashazi was a well-financed company backed by strong shareholder commitments that intended to build up a regional player in the middle-east. They struck a 3 years licensing agreement that was based on using Wirecard platform on a white label SaaS (Software as a Service) basis. Such a licensing agreement classically consists of a minimum transaction volume they pay for covering the minimum costs to run such a platform and a variable per transaction fee above that. The EUR 12mn were an aggregate projection based on their business plan. Of course in the financial statements only the annual amount was included that they had to pay. This was an aggregated amount of about two third (around EUR 8mn) of the initially forecasted amount. Ashazi fully honored their commitments and we have no open balance with this company.

Christopher Bauer, a German businessman with experience at payments companies, was also involved at Ashazi Services for 8 months in 2011. He said the company was “in the development stage, definitely” when he joined in January that year, with a small number of employees trying to win new clients. He said there was a licence bought for a payment gateway, “but it was before my time”. He said, “I was more on the PR and marketing side” and “most of the time it was her who did the work”.

Mr Bauer’s previous company, the Philippines based PayEasy Solutions International, had employed as chief operating officer James Bergman, former chief executive of the Aim-listed money transfer group Earthport. Mr Bergman said Ashazi “had more than two or three staff, it wasn’t just a one man band working out of a bedroom.” He said Ms Sururi was “a very intelligent lady. She was an impressive young female entrepreneur with a lot of drive.”

Ms Sururi said, via email:


I am a well-known and reputable businesswoman and entrepreneur in Bahrain, and I am looking back on a successful career of more than 10 years in the payments industry…

Ashazi was at all times managed and operated in full compliance with the laws and regulations of Bahrain. The UK branch was founded with the intention to obtain a payment institution license under the British Financial Conduct Authority (FCA) although eventually it did not become operational.

Ashazi has written proof of hSenid’s partnership with and I am surprised by your claim that a senior official of hSenid allegedly does not remember the cooperation between the two companies. In any event, I am not obliged to and will not provide you with confidential business information related to past commercial dealings with any of Ashazi’s business partners.

In relation to E-Credit, we would advise you to refer any questions related to E-Credit to representatives of E-Credit.

Ms Sururi’s Linked-In profile now describes her occupation as a TV presenter and actress since 2008. Bait Shazi Trading Co WLL, her new company registered in 2012, is an events business.

E-Credit Plus and a five-headed reseller

Wirecard purchased E-Credit Plus for €10.3m, plus future “earn-out” payments of €2.5m, on December 28, 2009.

What might be considered unusual is that ownership of the company changed hands three times in the two months before the sale, according to Singapore filings. In November BS Payment Singapore Pte Ltd sold to Kennedy Jayaprakas J M Aime, a Malaysian individual listed as a director of E-Credit. Ownership then passed to Credence Collection Singapore Pte Ltd, on to the Malaysian Commerce Connecting Pte Ltd, then finally to Wirecard.

The company said, “before the transaction there were changes in ownership which were in good order with respect to the purchase of the company. The background of the transactions is a matter solely concerning the former owners.”

In 2010 the audit opinion for E-Credit was qualified due to problems verifying the validity of “gateway fees” from a subsidiary, Infotop Singapore.



Infotop was one of five resellers listed in note 14 to the E-Credit accounts detailing “Gateway Fees”:


In 2010 the company has entered into ECP Relationship Management Partner Agreement with Ugrand Universal Limited, Infotop Singapore Pte Ltd, Credence Macau Ltd, Manboo UK Limited, and E-Credence UK Limited (Reseller).



E-Credit reported S$1.3m in gateway fees for 2010, compared to zero in 2009.

What might be considered odd is at the start of the year four of those so-called resellers for Wirecard were owned by Wirecard. A German filing lists them as subsidiaries.

The two UK entities, Manboo and E-Credence UK, were dormant, according to Companies House.

By the end of 2010 all four resellers were owned by the fifth, the Hong Kong registered Ugrand Universal.

In 2013 Deitmar Knoechelmann, a former director of Wirecard subsidiaries, became a 50 per cent owner of Ugrand, according to Hong Kong filings.

Wirecard said Ugrand is an external independent company and the four subsidiaries were not related parties. It said, “for HGB (German local GAAP) the legal ownership is relevant, while for IFRS the control is relevant, which was not taken over by Wirecard Group. The business background was that as part of the consolidation of the heterogeneous structure of E-credit we did not intend to take over these companies.”

Nature of the beast

Some might expect a software licensing deal to be highly profitable. After all, the purpose of buying customers is simply to push more transactions through Wirecard’s existing systems and infrastructure, and software is straightforward to replicate. However, founder and chief executive Markus Braun said Ashazi “was not a very profitable deal”. He said, “when the whole technology is on us, it produces a whole load of costs, proprietary development, local support.”

Perhaps such deals are a natural consequence of dealing with small payments companies. It is unusual to find individual customers listed in the accounts of companies bought by Wirecard, so Ashazi and Ugrand may be outliers, or they may be representative. The puzzle that is the nature of Wirecard’s long expansion remains.

Related Links:
The Wirecard Documents – FT Alphaville
Ashazi Services Co WLL registration
E-Credit Plus Singapore Annual results 2009 2010 2011 2012
E-Credit Plus Singapore change of ownership filings, Nov 10, Dec 7, Dec 14, Dec 29
E-Payment Singapore annual filing 2012
Ashazi Services UK annual return 2014
Manboo UK ltd annual returns 2009 2010 2011 2012
E-Credence UK ltd annual returns 2010 2011
Ugrand Universal limited Hong Kong Annual Return 2013 and director change

This entry was posted by Dan McCrum on Tuesday May 5th, 2015 10:10. Tagged with Ashazi Sevices, House of Wirecard, Wirecard.  

Wirecard Gibraltar and an asset rich wind-up

Dan McCrum  











|  May 26 14:31  |  Comment  |                          Share










 

Gibraltar places few obligations on companies to report. Filings can be sparse and, in practice, lodged years after the financial events they record. Yet even limited information may be useful: in the case of Wirecard Gibraltar, it shines a light on a subsidiary subject to a long liquidation.

The entity, which appears to have contained around €50m in retained earnings and a larger amount of intangible assets, remains in the wind-up process more than two years after being placed in a solvent liquidation by Wirecard, the German listed electronic payment provider valued at €4.6bn.

Documents filed in the British Overseas Territory contain different figures from those in accounts filed in Germany, variations the company says are due to differences in accounting standards.



An early subsidiary

Wirecard was founded in 1999, backed by venture capital, but went bust following the dotcom crash. The company was recapitalised in early 2002, in part with money from the incoming chief executive Markus Braun. When merged into call centre group InfoGenie at the start of 2005, gaining a stock market listing by reverse takeover, Wirecard was described as a wholly owned subsidiary of “ebs Holding AG”.

Electronic Business Systems was another payment company, also based just outside Munich, founded in 1998 by Paul Bauer-Schlichtegroll, who would go on to sit on the Wirecard supervisory board for several years. The relationship between EBS and InfoGenie dated back to at least 2002, when a “strategic commitment of ebs Holding AG” to integrate a subsidiary into InfoGenie helped stabilise the call centre operator struggling with losses and the departure of key staff at the UK subsidiary following “a critical due diligence audit”, according to the annual report.

Wirecard Gibraltar was established in 2005. Mr Braun, still chief executive, told us merchants wanted services provided from the territory.



The Gibraltar Registrar of Companies holds balance sheet filings for Wirecard Gibraltar for 2005 to 2010.

The 2005 document, filed in May 2011, is largely blank. It details only share capital of €149,510, which might be considered odd given the £100,000 (€150,000) capital increase used to fund Wirecard Gibraltar occurred in 2006, according to Wirecard’s annual report for that year:


In the year under review, a non-cash capital increase was effected in connection with the acquisition of a customer portfolio, from 100 shares to 100,000 shares of 1 GBP each.

A “notice of increase of nominal capital” filed in Gibraltar reports the capital increase was the subject of a December 2006 resolution.

We asked Wirecard how the capital had appeared to arrive early. The company said:


The money you refer to did not ‘arrive a year early’. This is clear from the 2005 filing itself, which states the same figure as a trade receivable. This clearly shows that the money had not arrived in 2005. It arrived in 2006.

The 2005 balance sheet for Gibraltar was filed in 2011, at the request of the Gibraltar authorities. As we already had the figure of the share capital on the 2006 Gibraltar filing, we simply transcribed this across to the 2005 balance sheet, together with the same figure as a trade receivable.

Profits in their place

Wirecard’s annual report for 2005 recorded a “contribution to earnings before consolidation” from Gibraltar of €2.3m.

The next annual report attributed revenues of €6.3m and operating profit of €2.3m to “Europe” for 2005. At the time the non-German operations for Wirecard were Gibraltar and the remnants of InfoGenie, which reported turnover of about €600,000 in 2005, and minimal operating profit.

The annual report details revenues of €28.6m from Europe for 2006, and operating profit of €6.2m.



Accumulated profits of €8.4m in the 2006 Gibraltar accounts match net profit numbers reported for the subsidiary by Wirecard over two years: €6.1m in the 2006 Wirecard AG local accounts lodged at the Federal Gazette, plus the €2.3m profit for 2005 mentioned above. The Federal Gazette does not have electronic copies of accounts for 2005 or earlier.

Wirecard said “2005 was not a full year of operation for Wire Card (Gibraltar). The 2005 financial figures for Wire Card (Gibraltar) were included in one filing in 2006, which comprised the extended fiscal year (2006 and part of 2005). This is standard practice in many jurisdictions.”

The Wirecard Gibraltar accounts for 2006 (filed in April 2010) list €30m of year end trade receivables — sales recognised but where cash is yet to be collected — more than the total for European revenues reported in the table above.

The company said: “As the consequence of the business model, trade receivables include transaction volumes (gross volumes) from the acquiring business as receivables. In the P&L you just find the commissions (typically a small single digit percentage of the transaction volume) as revenue.” It also referred us to point 3.6 in the group accounts for a more detailed description of the process.

Point 3.6 in the 2014 annual report includes such a description. “As the consequence of the business model, trade receivables include transaction volumes (gross volumes) from the acquiring business as receivables. In the P&L you just find the commissions (typically a small single digit percentage of the transaction volume) as revenue.” Language describing the effect appears in the annual reports from 2008 onwards.

Different standards

In 2007 Wirecard purchased another European business, Trustpay International, so it is not possible to compare figures for Europe in the consolidated accounts with those for Wirecard Gibraltar. However German accounts filed at the Federal Gazette each year list all the subsidiaries of Wirecard, each with figures for equity and net profit, which can be compared to the Gibraltar documents.

Here is everything reported in the Gibraltar annual filings (click to enlarge):



Here is the equity line from above next to numbers reported by Wirecard in its Federal Gazette filings:



The local filings report an accumulated profit number. The change each year corresponds to net profits reported in the German filings, minus dividends paid up to the parent, except for 2008, where an apparent mismatch 0f €0.66m corresponds to an apparent mismatch between the equity figures for that year.



The company said:


In 2006 the German filing shows the equity excluding the 2006 profit of €6.11m. From 2007, the German filings show the equity including the 2007 profit.

The reason for the 2008 differences in figures is solely differences between IFRS (Gibraltar) and local GAAP (Germany) specifically with regard to different valuation methods for valuation of assets. The same reason explains the differences in 2009 and 2010.

A long liquidation

The final balance sheet available for Wirecard Gibraltar is 2010, but the German filings provide some numbers up to the end of 2013, the latest available.



A voluntary wind-up order was filed in March 2013, and the Gibraltar filings show no conclusion to the liquidation. In March 2013 the sole director of Wirecard Gibraltar, Maurice Heller, declared (with our emphasis):


I have made a full inquiry into the affairs of this Company and that having done so, I have formed the opinion that this Company will be able to pay its debts in full within a period, not exceeding 12 months, from the commencement of the winding-up.

The Maurice Heller who described himself as a director of Wirecard Gibraltar on Linkedin said he was no longer a director of the entity, but is “still working for the concern group”. He did not respond to questions about the status of the Gibraltar company by Linkedin message. Moe Cohen, director of Benady Cohen & Co and the appointed liquidator to Wirecard Gibraltar, asked to be sent questions by email and then did not respond further.

The company said:


In the last years of Wirecard Gibraltar’s operations, Gibraltar was becoming less relevant as a location for online merchants in all sectors and other jurisdictions such as Ireland and the UK were favoured. After the significant number of M&A transactions, we were also seeking to streamline the global group structure wherever possible by not having too many subsidiaries. Wirecard Gibraltar was therefore put into a solvent liquidation in 2013.

It also said, “All the necessary documentation was given to the local authorities and the liquidation remains in progress without any delay and issues. All third party debts were paid.”

In the eight years Gibraltar was operational, Wirecard reported €92m in profits from the subsidiary and withdrew €38m in declared dividends.

We asked Wirecard what happened to the assets on the balance sheet of Wirecard Gibraltar, worth €67m as of the end of 2010, and around €50m of retained earnings. It said:


The assets were transferred to other group companies (without any impact on the group´s balance sheet and the group´s P&L). The retained earnings will be transferred to the parent company with the finalisation of the liquidation.

Related Links:
Wirecard Gibraltar annual filings
Wirecard annual reports 2005, 2006
Infogenie annual reports 2002 2005 2006
EBS Group – May 29 2002 press release

This entry was posted by Dan McCrum on Tuesday May 26th, 2015 14:31. Tagged with House of Wirecard, Wirecard.  

die Kurzform hatte ich schonmal unter #638 gepostet.
Ich sehe da auch Zusammenhänge zwischen Leerverkäufen des CPPIB, des Ratings der Credit Suisse und dieser Falschmeldung. Aufgrund meiner Erfahrung aus 2008, als der Wirecard Bilanzmanipulation von Seiten der SDK unterstellt wurde, war mir klar, dass der Kursrutsch manipuliert wurde und ich hatte daraufhin die Nachricht gefunden, die Du hier gepostet hast und die Bafin darauf aufmerksam gemacht.

Leider regen sich die meisten hier nur drüber auf, aber agieren nicht - da bin ich etwas anders gestrickt.  

heult doch nicht wegen jeder kleinen Kursbewegung nach unten hier rum. Das ist eine Aktie!
Als ob ihr hier um Beträge zockt, wo jeden Tag Tausende Euro verloren gehen. Wenn ihr von Wirecard überzeugt seit deckt euch ein und genießt den hoffentlich bald wiederkehrenden Sommer und schaut im Herbst/Winter auf den aktuellen Stand.  

das geht nicht um rumheulen, sondern um Kursmanipulation! Wenn ich sowas mitkriege, dann agiere ich - völlig egal, ob ich investiert bin oder nicht. Tue ich auch bei anderen Dingen im Leben, wenn ich nicht involviert bin. Schaust Du immer weg, wenn Du was mitkriegst aber nicht betroffen bist?  

kann deine Argumente nachvollziehen. Es gibt eine Handvoll Unternehmen, die mehr oder weniger positiv für ein Unternehmen eingenommen sind. Gleichzeitig dazu baut einne Gesellschaft eine Leerposition auf, plötzlich kommt ein anderer Analyst und stuft die Aktie um gut 30 % ab. Der Leerverkäufer baut seine Position aus und will kräftig absahnen. So sehe ich das und das ist schon sehr verdächtig in den AUgen eines Kleinaktionärs.
Das man bei Aktien schon mal daneben liegt liegt in der Natur der Sache, aber das hier ist schon fragwürdig.  

daran dass irgendjemand juckst was du machst?

Wenn jemand etwas peinliches auf der Straße macht schaue ich auch lieber weg ja...  

ja Neuer1 kenne die WDI schon intensiv und ziemlich lange. Schau Dir mal den Kurs der WDI Mitte Juni - Mitte Juli 2008 an. Da hat sich der Kurs in Folge von Marktmanipulation in wenigen Wochen halbiert und mein Depot auch. Mitarbeiter der SDK (Schutzgemeinschaft der Kleinanleger) sind erst short gegangen und dann in den Knast.

Und @DoRuss: Das bewirkt sehr wohl etwas, wenn man z.B. der Bafin etwas meldet. Dazu ist sie da und auf Hinweise angewiesen. Die Bafin fordert Dich bei einer Anfrage auch auf Ihnen mitzuteilen, was Dir aufgefallen ist. Die sind dafür eingerichtet und gehen Hinweisen definitiv nach.  

... Kleinanleger war falsch, sorry  

Jammern nicht wirklich, aber es gibt halt auch solche, die nicht in Aktien, sondern in knock outs investieren. Da spielt es eine Rolle, wenn der Kurs mal 10% zurückgeht, obgleich die langfristige Perspektive stimmt. 2008 war für mich ein hartes knock out Jahr. Daher bin ich sehr sehr senbsibekl, was Kursmanipulation angeht. Leider ist das Umfeld aber auch gerade für Manipoulos günstig.
 

..ist doch eine gute Ausgangsposition, für einen neuen Angriff auf neue Kurshöhen 

 

Odey Asset hatte es letztes Jahr nicht geschafft und diesesmal sind sie zu dritt.
Also noch gefaehrlicher, denn wenn einer glatt stellt und der Kurs anzieht muessen die anderen ggf reagieren und treiben den Kurs noch schneller.

Ist zwar nicht schoen, was ihr ab geht, doch aendern laesst es sich nicht.

Vielleicht kommen ja noch weitere groessere Kaeufe durch Privatinvestoren, oder durch die geschaeftsfuehrenden Organe.  

wenn sich jemand engagiert und sich die Müher macht den Verdacht zu melden.

Weiter so!

 

Canada Pension Plan Investment Board

Toronto

Mitteilung von Netto-Leerverkaufspositionen

Zu folgendem Emittenten wird vom oben genannten Positionsinhaber eine Netto-Leerverkaufsposition gehalten:

Wirecard AG

ISIN: DE0007472060

Datum der Position: 26.05.2015

Prozentsatz des ausgegebenen Aktienkapitals: 1,32 %
 

versilbert und bin jetzt ungefähr zu 4/5 wieder drin. Den Rest haue ich demnächst rein, eventuell sogar heute. Ich sehe das alles sehr entspannt. Es ist ja offensichtlich, woher die Kursschwäche kommt. Der Insiderkauf vom CEO neulich dürfte wohl alle diejenigen beruhigen, die fundamentalte Zweifel hatten.

Lasuerte möchte ich an dieser Stelle ausdrücklich danken. Persönlich meine ich, dass das zur Börse (leider) dazu gehört und nichts bringen wird, aber ein Engagement egal wo ist immer zu begrüßen. Euch allen gute Nerven und noch bessere Geschäfte.    

 

 

 

 

Ne Bemse wäre ja wohl wirklich angebacht !  

ist jetzt böse angeschlagen. Schade dass ich wieder einfestiegen bin. Kann lange dauern bis wir zurück sind  

 

 

Hier finden nur ein paar Spielchen statt,drin bleiben,aussitzen,geht genau so schnell wieder hoch.
Ich gebe nicht eine einzige Aktie her.Story ist so intakt,gerade im Bezug auf die Diskussion um das drastische Einschränken des Bargeldverkehrs!  

GD200 bei 35
BB 36,5

Der erste Angriff vor 3 Wochen hat da viel aufgemacht und es gibt jetzt einen mittelfristigen Abwärtstrend.

Erinnert mich alles sehr stark an Odey Asset Management letztes Jahr. Da hat es ein halbes Jahr gedauert bis der Kurs dann letztendlich wieder explodiert ist.