BERLIN, Feb. 18 (Xinhua) -- The German Federal Financial Supervisory Authority (BaFin) has issued a ban on establishing and increasing net short positions in shares of global payment service provider Wirecard AG on Monday.
BaFin explained its decision by "developments which posed serious threats to market confidence in Germany". According to Bafin, the decision had been triggered by the share price development of Wirecard in recent weeks. The German financial supervisory authority announced that the ban applied until April 18, 2019.
Wirecard, which is one Germany's top 30 companies and thus DAX-listed, experienced severe price falls after the British newspaper Financial Times reported about alleged fraud committed by Wirecard subsidiaries in Singapore.
In the past two weeks, Wirecard lost around 40 percent of its market capitalization which corresponds to a decline of almost 10 billion euros (11.3 billion U.S. dollars) in market value and coincided with an increase in net short positions against the German payment provider.
Wirecard has rejected the reports by the Financial Times as defamatory and denied that any breaches of law had been detected.
In connection with alleged manipulations of the Wirecard share price, the Munich public prosecutor's office is investigating against a journalist of the Financial Times. "we have entered a preliminary investigation on the basis of the criminal complaint," the public prosecutor's office announced on Monday.
"The whole story is a non-story", Wirecard CEO Markus Braun told the Germany newspaper Handelsblatt. "We have worked through everything. There is no risk at all. We did not have to make any corrections or adjustments in the accounting department", Braun added.
Wirecard had already been the target of so-called "short attacks" in 2008 and 2016, according to BaFin. In these short attacks, "short-sellers profited from entering into certain positions, resulting in corresponding decreases in the share price of Wirecard AG".
Investors reacted positively to the German financial authority's decision. Wirecard's share price rose by around 13 percent to 113 euros over the course of trading on Monday.
