Wirecard ANZ boss Karl Mohan exits

Embattled payments group Wirecard, is losing its Australia and New Zealand boss Karl Mohan, according to sources.

Picture: AP

Embattled payments group Wirecard, which is mired in controversy around the world, is losing its Australia and New Zealand boss Karl Mohan.

As revealed by The Australian online, local staff were on Tuesday told of Mr Mohan’s resignation, and he is said to be staying on for three months before exiting to help Wirecard’s local entities navigate the global firestorm.

Mr Mohan joined the group just a year ago and became head of Australia and New Zealand in January.

The internal announcement about his departure comes as Germany’s Wirecard is embroiled in a scandal that has spread across many parts of the world, and has implications for banks and other financial institutions in Australia.

The company last week spectacularly collapsed after filing for insolvency, following a scandal and alleged fraud concerning a missing €1.9bn. The controversy has also tainted the reputation of long-term auditor EY and that of Germany’s regulators.

Wirecard representatives were unavailable to comment on Mr Mohan’s departure by the time of publication. His LinkedIn profile shows he joined Wirecard last year after a four-year stint at National Australia Bank, where he was head of partnerships and growth and prior to that led e-commerce solutions.

Wirecard employs about 50 staff across Australia and NZ and sources said ongoing salaries were unable to be guaranteed given the insolvency process.

The group’s global woes have also caused issues for Australian banks and payments operators.

Westpac is said to have a small exposure to Wirecard, although not via lending, Bendigo and Adelaide Bank runs the German group’s products but on its own internal systems, and payments group Cuscal counts Wirecard as a third-party provider.

Industry superannuation fund-owned bank ME has said its customers won’t be impacted by the Wirecard issues, even though it uses third-party software licensed from a NZ company that was acquired by Wirecard.

“This software is restricted to card management only and is managed on ME’s own data centres,” a spokesman said.

“ME has the contractual right to service and maintain this software with any provider should Wirecard become insolvent.”

Last year, ANZ was linked to Wirecard controversy when it probed a fraud against its travel card business, much of which was outsourced to the German company.
ANZ fortuitously exited the travel card product about a year ago and is said now to have no exposure to Wirecard.

NAB doesn’t have any Wirecard exposure, nor does Commonwealth Bank.

Wirecard operates two entities domestically Wirecard Australia, which doesn’t lodge financial accounts, and Wirecard Australia A&I.

Accounts lodged with the corporate regulator for Wirecard Australia A&I – which issues prepaid cards, undertakes transaction acquiring and payment services – showed losses for 2019 printed at $6m, narrowing from $14.6m in 2018.

Mr Mohan is one of three directors of that entity. It purchased a Citibank business that transferred to Wirecard in late 2019, but also shows clear signs of not being able to pay its debts.

The accounts showed the operations were propped up by a $10m capital raising in May, and note that the parent entity will provide “necessary financial support” because total liabilities exceed assets for Wirecard Australia A&I by $4.3m.

The accounts – audited by PwC Australia – also note the challenges posed by COVID-19 and an increase in the allowance for expected credit losses. It is unclear, though, if the local Wirecard entities will be caught in the global insolvency process which is currently limited to specific entities.

Wirecard’s former global chief executive Markus Braun was released from police custody on bail last week, after his arrest on suspicion of falsifying Wirecard accounts.