• The German payments-processor Wirecard soared 30% after an external report found suspicious transactions in its Asian business would have "no material impact" on its financial statements.
  • Last week, the short-seller Fahmi Quadir strongly critiqued Wirecard, noting the report found current employees likely engaged in criminal activity.
  • Quadir splashed on the scene with bearish bets on Valeant in 2015, taking on the hedge-fund manager Bill Ackman.

The short-seller Fahmi Quadir of Safkhet Capital strongly condemned the German payments-firm Wirecard in a series of tweets Tuesday.

The company, with a market cap of $17 billion, is one of Germany's largest financial institutions, having surpassed Deutsche Bank and Commerzbank in market cap.

Wirecard had previously drawn attention from a report by the Financial Times raising allegations that a senior executive in the firm's Asian business was suspected of backdating forged contracts in a string of suspicious transactions. The transactions appeared to "round-trip" funds between entities, booking them as investments.

Despite an external report released Tuesday that found Wirecard's financial statements would not be impacted, Quadir said the company still deserves to be scrutinized. The release of the report sent Wirecard's stock soaring by more than 25%.

Safkhet Capital
Twitter/@SafkhetCapital
Safkhet Capital

Wirecard strongly denied the accusations, and commissioned an external investigation from the Singaporean law firm Rajah & Tann. A summary of the report's findings were made available on Wirecard's website.

Quadir's tweets also highlighted how the report found that some of the company's key employees in Asia were likely engaged in criminal activity and that the investigation, which only covered the Singapore office, may be ongoing.

Safkhet Capital managed over $30 million at the end of 2018 and has been "significantly short" Wirecard since the firm's inception in January, 2018.

In February, Quadir wrote an open letter addressed to German regulator BaFin protesting a ban on new short sales of Wirecard's stock . The regulator cited the risk of "excessive price movements" as a reason for the ban given the "company's importance for the economy."

Quadir, who is 28, famously crossed swords with the famed hedge-fund manager Bill Ackman on the pharmaceutical company Valeant in 2015. She was short the stock and Ackman was long. He ultimately lost billions of dollars before closing his position .

Quadir was featured in Netflix's acclaimed documentary series "Dirty Money".

Wirecard stock chart
BusinessInsider
Wirecard stock chart

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