Wirecard AG WDI
KPMG's failed audit of Wirecard's EUR 1bn trustee cash and TPA revenues creates a legal duty for the supervisory board to remove the CEO immediately.
Thesis
TCI, disclosing a 1.04% short position, writes to Wirecard supervisory board chairman Thomas Eichelmann on the day KPMG releases its long-delayed special audit. KPMG could not verify TPA revenues for 2016-2018 or EUR 1 billion of cash supposedly held in trustee accounts by TPA partners (versus only EUR 85m actually paid into Wirecard bank accounts), and could not identify the beneficial owner of EMIF behind the Hermes India acquisition. KPMG cites an Untersuchungshemmnis: management delayed documents, cancelled executive meetings, and TPA partners refused to cooperate. TCI argues the supervisory board has a legal duty of care under the Aktiengesetz (sections 84(3), 93 and 116) to intervene by removing the CEO from management duties, or at minimum taking direct responsibility for the investigation and excluding management. Failure to act, TCI warns, itself constitutes a breach of fiduciary duty exposing board members to personal liability.
SCQA
Wirecard AG, a DAX-listed payments processor holding a European banking licence, historically books a significant share of revenues and profits through a Third Party Acquiring partner network funnelling customer cash into trustee accounts.
KPMG's six-month special audit could not verify TPA revenues for 2016-2018 or EUR 1bn of trustee cash because management delayed documents, cancelled key meetings and TPA partners refused to cooperate — an Untersuchungshemmnis.
The supervisory board must immediately remove the CEO from management duties and assume direct responsibility for resolving the audit, invoking its duty of care under sections 84(3), 93 and 116 of the Aktiengesetz.
Not quantified: TCI holds a 1.04% short, not a long. The implicit payoff is vindication of fraud allegations and equity collapse if the board fails to intervene credibly.
The three reasons
- 1
KPMG could not verify TPA revenues for 2016-2018 nor EUR 1bn of trustee-account cash
- 2
Wirecard management obstructed the audit: delayed documents, cancelled executive meetings
- 3
Supervisory board has a legal duty of care (Aktiengesetz 84(3), 93, 116) to intervene
Primary demands
- Remove the CEO from all management duties immediately
- Supervisory board take direct responsibility for the KPMG investigation
- Exclude Wirecard management from any further involvement in the audit
- Resolve the outstanding questions KPMG was unable to answer
KPIs cited
Pattern membership
Slide gallery ·
Notes
Three-page open letter on TCI letterhead, signed by Sir Chris Hohn and Max Schroeder, sent to Wirecard supervisory board chairman Thomas Eichelmann the same day KPMG released its special audit (28 April 2020). Rhetoric is litigious and citation-dense: nearly every paragraph pins a finding to a specific KPMG report page number, and TCI invokes Aktiengesetz 84(3), 93 and 116 to argue the board itself risks personal liability if it fails to act. The 'villain' is the CEO (Markus Braun at the time) and Wirecard management, but the letter refers to them only by position, not by name — so villain_named is recorded as false. Unusually for an activist letter, TCI simultaneously discloses a SHORT position (1.04% via BaFin / Federal Gazette) rather than a long, making this a hybrid governance-letter / short thesis. Visual production is a plain corporate letter — no charts, no typography craft — but the prose architecture (Situation: KPMG failed. Complication: why KPMG failed. Resolution: you must fire the CEO) is a clean worked example of SCQA in letter form.