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Home Business Jan Marsalek’s behind-the-scenes role in Wirecard’s most contentious deal

Jan Marsalek’s behind-the-scenes role in Wirecard’s most contentious deal

It was Wirecard’s greatest deal — and its most controversial.

In October 2015, the German expertise firm agreed to pay as much as €340m for a set of small, barely worthwhile Indian fee teams.

Two of the businesses, Hermes I Tickets and GI Technology, had been concerned in processing funds for simply a few years. Wirecard chief government Markus Braun hailed the deal, saying on the time that it might strengthen the corporate’s place “in one of the world’s most rapidly growing electronic payment markets”.

The targets had been bought to Wirecard by an entity primarily based on the island of Mauritius referred to as Emerging Markets Investment Fund 1a, which was solely integrated in February of that 12 months.

EMIF 1a had purchased the Indian corporations simply six weeks earlier for a fraction of the worth. The final useful house owners of the Mauritius entity, which reaped substantial income from promoting the fee teams to Wirecard, have remained a thriller.

Wirecard collapsed in June final 12 months in certainly one of Germany’s largest accounting frauds. For years, questions have lingered over whether or not a number of Wirecard executives had been behind EMIF 1a and may need thereby had entry to tons of of tens of millions of euros.

Emails and inside paperwork reviewed by the Financial Times, mixed with a witness assertion given to Munich prosecutors investigating the downfall of the as soon as lauded firm, present additional perception right into a transaction that’s the topic of a number of lawsuits.

Months earlier than takeover talks began between Wirecard and EMIF 1a, Jan Marsalek, the German group’s former chief working officer and now a fugitive, had launched into a mission to enhance the web sites of the Indian fee corporations.

According to emails reviewed by the FT, Marsalek was launched to the co-founders of the fee teams by Henry O’Sullivan, a British businessman who suggested Wirecard in Asia and entered no less than one partnership with the corporate in the area.

Vienna introduction

The Briton was amongst these believed to have managed EMIF 1a, a former enterprise affiliate of O’Sullivan and Marsalek has instructed Munich prosecutors, in line with folks conversant in the investigation.

Internal Wirecard emails seen by the FT present he was briefed about issues associated to EMIF 1a after the acquisition of the Indian fee teams, and was an in depth confidant of Marsalek.

A looking fanatic and prolific dealmaker, 46-year-old O’Sullivan has enterprise pursuits from oil buying and selling to funds processing.

It was in late 2014 that O’Sullivan put Marsalek in contact with Palani Ramasamy, who together with his brother Ramu, had co-founded Hermes and GI Technology.

“Palani and his brother Ramu are good chaps who I would always be interested in doing business with in any way,” O’Sullivan wrote in an introductory electronic mail. Marsalek subsequently met Palani Ramasamy in December 2014 in Vienna’s luxurious Hotel Sacher.

Henry O'Sullivan
Documents reviewed by the FT present that Henry O’Sullivan, a British businessman who suggested Wirecard in Asia, had a behavior of avoiding written references to his actual identify © LeongAC/Running Shots

Project Peacock

In March 2015, Marsalek started redesigning the website of Hermes, one of many Indian fee teams. Wirecard’s former chief working officer commissioned a Munich-based designer, offered photos and textual content and personally oversaw the work. Hermes was geared up with a state-of-the-art website, and each it and GI Technology got fashionable logos.

“We were under quite intense time pressure,” the online designer, who requested to not be named, instructed the FT. His firm regularly labored for Wirecard, and mentioned he had assumed Hermes and GI Technology had been already a part of the German group.

“It was a bit unusual that all of the communication even about minute details was solely with an executive board member,” he mentioned.

Emails present that Wirecard footed the invoice for the revamp, about €25,000.

Weeks after the brand new Hermes web site went on-line, Wirecard started the takeover talks with EMIF 1a. Dubbed “Project Peacock” inside Wirecard, Marsalek was eager to get the deal achieved shortly.

“He put a lot of pressure on us, as he wanted to get the project done by the end of September,” mentioned one former Wirecard worker who performed a key role in the transaction.

The individual, who spoke to the FT on the situation of anonymity, mentioned he often had the impression that “my own executive [Marsalek]” was an impediment to rigorous due diligence. “It was a bit strange: We were working on the biggest M&A transaction in our history and yet nobody from the board even asked for a fairness opinion.”

Such unbiased third-party assessments of an organization’s valuation are commonplace when making acquisitions.


EMIF 1a, which acquired the Indian funds corporations for about €37m, banked with the Mauritius department of Standard Chartered and in 2016 engaged KPMG as its auditor. However, the Big Four agency instructed the FT that it ditched the mandate after six months because it was “not able to secure access to key information and individuals needed to conduct the audit”.

It seems Wirecard might have vastly overpaid EMIF 1a for the Indian corporations. In the times main as much as Wirecard’s implosion, an inside restructuring group put the worth of GI Technology at zero, in line with a presentation seen by the FT.

Markus Braun
A lawyer for Braun instructed the FT that Wirecard chief Markus Braun had no information of Marsalek’s work on the web sites of Hermes and GI Technology © Alex Kraus/Bloomberg

As a part of a lawsuit filed in London’s High Court by minority traders in Hermes alleging a conspiracy to defraud them, O’Sullivan, who was not a defendant, was described by the plaintiffs as one of many “principal representatives of the investors in EMIF”. The Ramasamy brothers denied the allegations, and the declare was dismissed by the courtroom.

Doubts over the EMIF 1a deal first emerged simply months after the transaction was introduced. In early 2016, a Wirecard worker primarily based in India instructed native EY auditors that “senior executives” of the German funds group straight or not directly held stakes in EMIF 1a.

A subsequent forensic investigation into “Project Peacock” by EY was aborted by Wirecard in 2018. Early final 12 months, EY’s anti-fraud group advised that Marsalek may be one of many house owners — an allegation that he vehemently denied on the time. Mauritian regulators suspended the fund’s licence after Wirecard’s collapse.

Florian Toncar, an MP for Germany’s Free Democrats, mentioned that the proof of Marsalek’s behind-the-scenes work on web sites of corporations that Wirecard later acquired was “hardly in line with an executive’s fiduciary duties”. The emails advised that “Marsalek prettied up websites so Wirecard could pay higher prices to EMIF 1a”, he added.

Shortly after Wirecard’s insolvency, Munich prosecutors accused Braun of masterminding the creation of EMIF 1a. Wirecard’s former chief government, who has been in police custody since July, denies any wrongdoing. People conversant in the investigation instructed the FT that police haven’t discovered any proof or witnesses supporting any involvement of Braun with EMIF 1a.

A lawyer for Braun instructed the FT the previous chief government had no information of Marsalek’s work on the web sites of Hermes and GI Technology. Nor did Braun have any private or skilled relationship with O’Sullivan, she added, declining to remark additional.

Keeping a low profile

In distinction to Braun, Wirecard’s chief evangelist and public figurehead, O’Sullivan saved a low profile.

Documents reviewed by the FT present that O’Sullivan had a behavior of avoiding written references to his actual identify.

In early 2020, when KPMG tried to interview him concerning the EMIF 1a transaction throughout a forensic audit commissioned by Wirecard’s supervisory board, he wrote an electronic mail to the funds group searching for “assurances that any written or electronically communicated notes circulated to [Wirecard] do not mention my name at all”.

According to emails seen by the FT, an adviser to Wirecard’s supervisory board advised O’Sullivan be known as “Ms Corinna Müller”, including that this was accredited by the corporate. The emails present that O’Sullivan was subsequently referred to utilizing the fictional identify inside Wirecard.

Emails despatched to Marsalek in 2016 present {that a} key determination maker at EMIF 1a used the tackle “”.

O’Sullivan’s first two names are “James Henry” and an analogous electronic mail tackle was in use at Senjo Group. Senjo is a Singapore-based enterprise associate of Wirecard the place the businessman was additionally a choice maker, in line with folks conversant in the matter. There seems to be no proof that anybody named James Henrie ever had any place at Wirecard, Senjo or EMIF 1a.

Companies related to O’Sullivan acquired giant loans from Wirecard. Loan paperwork by Wirecard Bank describe O’Sullivan as “personally known to Wirecard executives and of impeccable integrity”, in line with the appendix of KPMG’s forensic audit into Wirecard.

O’Sullivan is believed to be in Singapore, in line with folks conversant in the matter. Singapore police, which final summer time mentioned that they had opened an investigation into Senjo, declined to remark. Senjo Group didn’t reply to a request for remark.

Despite a number of efforts, the FT couldn’t attain O’Sullivan for remark. Palani and Ramu Ramasamy didn’t present responses to requests for remark by the FT.

Marsalek absconded in June final 12 months and is on Interpol’s most-wanted record. A lawyer for Marsalek declined to remark. Munich prosecutors declined to remark.

Additional reporting by Stefania Palma in Singapore and Dan McCrum in London.

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Updated on April 23, 2021 4:59 am

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