10 Aug 2020
Singapore police brought their first criminal charges against an individual linked to the suspected fraud at Wirecard AG, the one-time German technology star that collapsed at the end of June after admitting more than $2 billion of cash on its balance sheet was fake.
The city-state’s white collar crime division charged R. Shanmugaratnam, a director and owner of Citadelle Corporate Services Pte Ltd., with falsifying papers that showed more than €100 million ($118 million) in three separate escrow accounts held on behalf of Wirecard, according to charge sheets reviewed by The Wall Street Journal.
The charges were filed in early July against Mr. Shanmugaratnam, a 54-year-old Singapore citizen. They alleged he falsified the letters from Citadelle to Wirecard in March 2016 and 2017 and that he did so willfully “and with intent to defraud.”
Citadelle provides corporate management services, such as company formation and accounting services, and acted as a trustee in charge of bank accounts that supposedly held Wirecard funds from the fintech company’s business partners.
The three escrow accounts purportedly held €143.4 million ($169.5 million) in total at the end of 2015, and one of them held €177.5 million at the end of 2016, according to the charge sheets. In reality, the three accounts didn’t hold those funds, they said.
Mr. Shanmugaratnam is currently out on bail of S$150,000 ($109,386), according to the Attorney-General’s Chambers in Singapore. His lawyer, Narayanan Sreenivasan, declined to comment. If found guilty, Mr. Shanmugaratnam faces a maximum sentence of 10 years in jail and a fine for each of the four charges. Citadelle Corporate Services couldn’t immediately be reached for comment.
Wirecard, one of Europe’s fastest-growing electronic-payments companies, stunned investors in June when it revealed that it couldn’t locate more than $2 billion in cash. Its shares plunged and the company filed for bankruptcy within weeks as the accounting scandal deepened.
Several former Wirecard executives were arrested last month by prosecutors in Munich, who accused them of colluding to inflate the company’s results by booking fake income from as early as 2015.
The suspected fraud was uncovered when auditors at Ernst & Young GmbH declined to sign off on Wirecard’s 2019 accounts, saying that bank letters confirming that €1.9 billion ($2.2 billion) was held in escrow accounts controlled by a trustee were forged. Those letters related to a trustee and two banks in the Philippines that had supposedly taken over the accounts in late 2019 from a Singapore-based bank and trustee.
In early July, Singapore police and the Monetary Authority of Singapore launched an investigation into Citadelle and another company with links to Wirecard called Senjo Group Pte Ltd., the authorities said at the time.
Mr. Shanmugaratnam and Citadelle have worked closely for years with a string of Singapore companies that have done business with Wirecard. According to public documents, Mr. Shanmugaratnam has acted as a director, secretary or shareholder of several companies that the Journal previously reported were controlled by Henry O’Sullivan, citing people familiar with him and the companies. Mr. O’Sullivan was a close associate of Jan Marsalek, Wirecard’s former chief operating officer, the Journal also reported, citing people who knew the men.
By Chong Koh Ping and Paul J. Davies, The Wall Street Journal, 7 August 2020
Read more at The Wall Street Journal
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