FRANKFURT (REUTERS) – The Financial Times has hired a law firm to review its investigations into German payments company Wirecard, which has sued the newspaper over a series of reports alleging accounting irregularities.
Editor Lionel Barber called in London-based law firm RPC after the Handelsblatt daily reported at the weekend that Wirecard had given evidence to German prosecutors alleging collusion between short sellers and employees of the Financial Times.
The FT, in a statement on Tuesday (July 23), rejected these allegations which it said it considered a diversionary tactic aimed at stifling further reporting on Wirecard.
“Given the seriousness of the allegations, I have decided to invite an external review into our reporting of this highly controversial story,” Barber said. “As a trusted news source, the FT’s reputation rests on its gold standard journalism, its integrity and a scrupulous approach to accuracy.”
Barber also gave a vote of confidence in the FT’s award-winning investigations team, headed by 30-year veteran Paul Murphy.
Earlier this year, the Munich public prosecutor launched an investigation into alleged market manipulation in Wirecard shares, which for years have been a favoured target for ‘short’ sellers seeking to profit from declines in its share price.
Germany’s financial watchdog Bafin temporarily banned the short-selling of Wirecard stock, but the ban expired in April.
The FT’s reporting, citing a whistleblower’s claims of fraud and creative accounting at Wirecard’s Singapore office, wiped up to US$10 billion off Wirecard’s market value and triggered a police investigation in the Asian state.
Wirecard denies the allegations and has filed a suit at the Munich regional court against both the FT and its lead reporter on the stories, Dan McCrum, seeking a ruling on the merits of its case. If successful, the company would then press for financial redress.
Last week Wirecard, which was last year admitted to Germany’s DAX index of 30 blue-chip stocks, announced deals with retailer Aldi and car-dealing platform AUTO1, in which Softbank is an investor, lifting its shares.