European Investors – VEB seeks compensation from four European banks having acted as Joint Global Coordinators or Joint Bookrunners for the significant damage the Noteholders have incurred in consequence of the banks’ deficient due diligence on Wirecard A.G. as the issuer in September 2019.
Paul Koster, CEO of European Investors – VEB:
“These banks should function as gatekeepers for investors through their thorough due diligence process. However, they dramatically fell short to offer any protection for investors. It is very disappointing to see all checks and balances and all lines of defence failing at Wirecard.”
Deficient due dilligence
In September 2019, Crédit Agricole Corporate and Investment Bank, Deutsche Bank Aktiengesellschaft, and ING Bank N.V., acted in the capacities as Joint Global Coordinators at the issue of the ‘EUR 500,000,000 0.50 per cent. fixed rate Notes due 2024’ (‘Notes’) by Wirecard A.G. ABN AMRO Bank N.V. acted in the capacity as Joint Bookrunner.
Given the disastrous developments at Wirecard since the offering, the banks‘ due diligence likely is materially deficient.
Due to large scale financial irregularities, Wirecard is facing difficulties. On 25 June 2020 Wirecard filed for insolvency and its stakeholders brace themselves for a bankruptcy. Likely, investors are confronted with considerable damages. This equally applies to parties having purchased notes and who either currently hold on to them or who have recently disposed of them (the ‘Noteholders’). Since the beginning of 2020 the Notes have lost over 80 per cent of their value and on 16 July 2020 they traded at approximately 13 per cent of their nominal value.
Letter to the banks
On Wednesday 8 July 2020, European Investors – VEB wrote to the four European banks, questioning them in detail on their due diligence with respect to Wirecard. The outcome of the due dilligence is contained in the 9 September 2019 Offering Memorandum. The 8 July letter is to be seen as the harbinger to legal proceedings against the banks.
Whereas European Investors – VEB has given the Banks two weeks from 8 July 2020 for their reaction, the intention is to seek compensation on behalf of the Noteholders. This may include inviting the Banks to enter into negotiations towards a fair and reasonable resolution, failing which European Investors – VEB may decide to file a claim for mass damages under Dutch law.
European Investors – VEB encourages Noteholders to join their action. Registration is possible per e-mail firstname.lastname@example.org or to call +31 (0)703130008. Adequate participation of Noteholders is required before European Investors – VEB launches formal proceedings.