Author: Michal Nulíček, Anna Cervanová and Bohuslav Lichnovský
Still seeing whistleblowing as a nuisance? Think again, because management misconduct can turn a company from hero to zero in days. Failure to handle warning notices was the reason for huge financial losses of customers, shareholders and creditors of Wirecard. The now bankrupt fintech company owes its creditors, including pension funds, more than €3.5 billion and its shares have plunged by 90% in a week. These losses could have been avoided. Since several years ago, whistleblowers have been warning about accounting malpractices. The company failed to act, and the financial regulator even actively protected it by banning the shorting of Wirecard’s shares and filing criminal complaints against journalists reporting on the case. Now company’s former CEO was arrested and the regulator itself faces investigation by the European Commission. So remember, ignoring malpractice will very likely lead to future losses. The longer these losses are ignored, the bigger they are. Proper investigation and oversight mechanisms are crucial for the protection of the company itself, its shareholders and other stakeholders. If they do not work, all that remains from your investment will be a zero on your bank account.
