London, Ontario

Entry-level labour shortage has flipped the power dynamic, says London recruiter

LONDON IS THE CLASSIC MIDDLE CLASS CANADIAN CITY ACCORDING TO POLLSTERS, ACTUARIES, ADVERTISING COMPANIES, ETC, ETC,

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Companies raise wages to compete for entry and mid-level workers

James Chaarani · CBC News · Posted: Sep 17, 2021 5:00 AM ET | Last Updated: September 17

A 'Help Wanted' sign hangs in a store window. Job hunters can have their pick of entry and mid-level jobs right now, says London recruiter James Norris. (Mark Lennihan/Associated Press)

A shortage of people willing and able to work entry and mid-level jobs has flipped the power dynamic between employers and job hunters, says James Norris. 

The sales manager with Express Employment Professionals, a recruitment agency in London, Ont., believes that it has become an employee's market.   

He said he's noted more change in the employment landscape over the last 12 months than over the rest of his six-year career in the industry. 

The type of jobs where the employees are in the driver's seat, he says, are entry-level to mid-level ones.

"So, if we're talking in kind of the $15.50 range up to about the $19, or maybe even $20 an hour range," says Norris. "That's a very competitive market because a number of companies — production, assembly, warehousing, distribution — they are all extremely busy right now as supply chain issues that had occurred over the pandemic have started to ease."

He says this, coupled with consumers buying more, has created a demand for workers. 

He's seeing that companies offering entry-level employment, or employment just above that, have upped their hourly rates a dollar or two more than pre-pandemic rates.

James Norris, sales manager with Express Employment Professionals in London                                   (Submitted by James Norris)

Employee shortage

He says that employees left the service industry or entertainment sectors, which were influenced most by restrictions or lockdowns, looking for new careers due to the instability of their employment.  

"I think another big factor in terms of individuals making a move or wanting to move to different companies or industries was a large part due to the way they felt they were treated or maybe the way they felt they were valued or not valued by their company," Norris said. 

He thinks COVID-19 financial assistance could have also played a role.  

• London's jobless rate drops in August with 1,900 people hired

Carolina Andrade agrees it has become a job hunter's market. She's a human resources manager for Meridian in Strathroy, which specializes in cast metal used in the transport industry.

She says her company has struggled to find people to work general duty and die cast. In the past, Meridian has been able to rely on foreign workers, but that isn't an option right now, as a result of the pandemic. 

• What does job hunting look like in a post-pandemic world? We talked to experts in London

"So, we have to rely only on people here," she says. "They sometimes are working, so we have to raise our salary to be able to compete with other companies." 

"The companies that have increased their wages are the ones that are winning what [they] call ... the recruiting race," she said.

At first, she said she thought people left the workforce because of things like Canada Emergency Response Benefit (CERB), but she doesn't think that's the case anymore. Now she believes her company has struggled to hire and retain people due to a highly competitive market. 

CBC's Journalistic Standards and Practices|About CBC News

Analysis: Clark rode big-time union donations to second term as Saskatoon mayor

For the most part, last year's municipal election showed the influence of money, but there were some exceptions.

Author of the article: Phil Tank • Saskatoon StarPhoenix
Publishing date:  Jul 03, 2021

Mayor Charlie Clark speaks with media after being declared the winner of the municipal election in Saskatoon, SK on Friday, November 13, 2020. PHOTO BY MATT SMITH /Saskatoon SarPhoenix

With less than a week before the 2020 Saskatoon civic election, three mayoral candidates held a most unusual joint news conference.

Zubair Sheikh, Cary Tarasoff and Mark Zielke united to decry the electoral system, and specifically the mayoral campaign spending limit of $229,497, based on Saskatoon’s population.

Their argument was based on the premise that the campaign spending limit effectively excluded lesser known candidates from competing in a contest that was really about who could raise the most money.

The trio suggested $76,000 as a more appropriate spending limit, noting the $68,776 mayoral spending limit in Regina for the 2020 vote.

Based on the eventual results in Saskatoon — infamously delayed by a severe snowstorm — it’s hard to disagree that money played a significant role in the final results.

Incumbent Mayor Charlie Clark topped the campaign contribution contest with $203,335.41, slightly more than he raised in his initial successful mayoral campaign in 2016.

Former mayor Don Atchison holds the record for campaign contributions with $209,668.77 in 2016, although he only spent $186,764.59.

Clark set a new record for campaign spending in 2020 by becoming the first mayoral candidate to crack the $200,000 mark with $203,335.41. He beat his previous spending record in 2016 by about $5,000.

Clark also topped the polls in the November election that was severely hindered by the snowstorm and attracted the lowest share of voters, 27 per cent, in an election that did not feature three acclamations since 1982.

Clark won the delayed election with about 47 per cent of the vote, followed by former provincial cabinet minister Rob Norris with 26 per cent and Atchison with 20 per cent.

Those results also mirror the campaign spending order; Norris was closest to Clark with $192,045.75 and Atchison was well back at $114,436.

That’s very similar to the spending and results from 2016, when Clark and Atchison each raised and spent more than twice as much as political newcomer Kelley Moore, who collected about 22 per cent of the votes.

Moore warned after the election that she could well be the last unknown to challenge credibly for the mayor’s chair, given the growing influence of money.

Sheikh, Tarsoff and Zielke finished with less than seven per cent of the combined vote. Sheikh’s $32,550 campaign, most of which appears to have been paid for from his own pocket, garnered just 1.23 per cent of the vote.

So where did Clark’s money come from and how did he, Norris and Atchison raise so much during the economic challenges of the pandemic?

Most of the top three campaigns got their donations from individuals, not unions or corporations, but the latter also played a role.

UNION DOLLARS

What’s most striking about Clark’s contributions is the degree to which unions contributed to his campaign.

Clark’s campaign war chest was boosted by $35,500 in union donations, more than 10 times the amount he received from unions in 2016.

The amount of union money in Clark’s campaign was nearly twice the eye-popping $18,000 the Amalgamated Transit Union Local 615 gave to Moore in 2016, which was believed then to be the largest single contribution in Saskatoon civic election history.

Clark’s record-setting campaign was bolstered by three $10,000 donations from United Food and Commercial Workers Local 1400, the United Steelworkers and the Canadian Union of Public Employees.

What’s puzzling about this is not only the huge increase from 2020, but that Clark tried unsuccessfully during his first term as mayor to move toward a ban on donations from unions and corporations.

One likely reason for his union support is that his chief opponent was perceived to be Norris, who, as labour minister in Brad Wall’s Saskatchewan Party government, introduced legislation that was reviled by organized labour.

Part of the law was struck down by the Supreme Court of Canada.

The wounds from that battle appear to have not quite healed, even though Norris would have had no direct influence on labour laws as Saskatoon mayor.

The Norris campaign appears to have failed to attract any union money, although donors who contribute less than $100 can remain anonymous.

Atchison got a lone $1,000 donation from CUPE Local 59, a huge drop from 2016, when he attracted $12,500 in union donations, including $10,000 from Saskatoon Firefighters Local 80.

Unions tend to donate to the candidate they think will win, which is almost always incumbents, regardless of political leanings. That could explain why a centre-right candidate like Atchison got more than three times as much from unions as left-leaning Clark in 2016.

BUSINESS BUCKS

Norris eclipsed the ATU Local 615 record cash donation in the last election with $20,000 from Kamp Shield Solutions, an Indigenous-owned Saskatoon company.

Norris also got $5,000 from Enviroway Detergent Manufacturing Inc., the same amount the Saskatoon business donated to Clark in 2016.

Atchison received seven $5,000 donations from corporations, including one from Sixth Avenue Arbutus. That’s the company that was spurned by city council, including Clark, in its attempt to establish a solar-powered community on the edge of Saskatoon.

This seems odd, since Norris was the one who repeatedly raised this issue, even well before the election.

One of Atchison’s $5,000 donations came from a numbered company. That’s the largest such donation in the 2020 campaign. Atchison got $7,000 from a numbered corporation in 2016.

All three of the top mayoral candidates received contributions from numbered companies, two apiece from six different entities.

Zielke raised nearly $3,000 in corporate donations, despite his much-touted business connections, so it’s easy to see the disparity between the big boys and the lesser knowns.

NOTABLE DONORS

Norris also set a record for the largest listed in-kind donation — goods or services rather than cash — with $32,064.88 attributed to Bob Baheri, the president and CEO of Enviroway.

Norris also claimed an in-kind donation of $19,629.94 from Dale Richardson, who helped manage his campaign.

Norris got the largest cash donation from an individual in the 2020 campaign, $8,500 from Jillian Loeppky. He also got $5,000 from William Norris.

Clark got $7,000 from the most well-known contributor to any campaign, best-selling author Yann Martel. That’s down from $10,000 for Clark in 2016, when Martel also played a very visible role in Clark’s campaign.

Clark’s famous in-law, Hollywood star Zach Galifianakis, again posted a video in support of Clark’s campaign on social media, as he did in 2016. But again, he was not listed among Clark’s donors.

Ryan Meili, who contributed to Clark’s 2016 campaign before he was elected NDP leader, did not donate last year, although NDP MLA Vicki Mowat gave Clark $250.

People with the last name Buhler, including Clark’s wife, Sarah, gave nearly $10,000 toward his campaign. He also got nearly $5,000 from people with the last name Clark and more than $10,000 from 11 donors with the last name Wiebe.

Atchison received a $9,500 in-kind donation from Brad Fenty and $5,000 from Jack Brodsky and his wife, Shirley. Brodsky ran Atchison’s 2016 campaign.

COUNCIL CASH

In general, council candidates raised far more money than their challengers and crushed them in spending. All nine incumbent councillors who ran in the 2020 election were re-elected, all but one by comfortable margins.

That’s probably why there’s a video circulating on social media with 2020 challengers lobbying for lower spending limits.

But money fails to tell the entire story.

Two council incumbents were outspent by challengers and still won.

Jonathan Naylor outspent Cynthia Block in Ward 6 ($19,764.06 to $18,976.79) and Jim Rhode spent more than Mairin Loewen in Ward 7 ($22,896.43 to $19,117.79).

Both challengers placed a distant second.

Several records were set in the Ward 7 race, with total spending by four candidates topping $63,000. That beats the more than $51,000 spent in 2016 between seven candidates in Ward 6. And it’s nearly as high as the spending in the 2009 mayoral campaign.

Rhode’s campaign ranks as the most expensive ever for a council seat, and he raised almost all of the money through donations. But it was only good enough to garner less than a quarter of the votes.

Naylor appears to have paid for his campaign entirely, but got less than 19 per cent of the vote.

Incumbent Darren Hill spent nearly twice as much as his closest challenger, Kevin Boychuk ($14,977.49 to $7,880.90), yet Hill only barely squeaked by with a 56-vote margin and just under 34 per cent of the vote. Hill’s donations included $4,592.49 from himself.

In vacant Ward 3, Nick Sackville outspent winner David Kirton $12,705.91 to $6,802.80, but Kirton topped the polls with 28 per cent to Sackville’s 22 per cent in an eight-candidate field. Kirton’s higher profile as a radio show host likely helped him win.

Incumbent Zach Jeffries raised the most of any council candidate with $32,711.47 and spent $22,483.79 — which still bested his two challengers combined by more than two to one.

Bev Dubois ($15,259.71) outspent her one Ward 9 challenger by nearly four to one, and Sarina Gersher (Ward 8) outspent her two challengers combined by more than three to one with $16,106.13.

Hilary Gough ($16,124.81) in Ward 2 outspent her challenger by nearly six times and Ward 5’s Randy Donauer ($16,209.24) outspent his challenger more than sevenfold.

Even Troy Davies, who was acclaimed in Ward 4, raised $7,543 and claimed $6,460.59 in expenses — more than most challengers spent on campaigns.

ptank@postmedia.com

twitter.com/thinktankSK

Scottish government sets stage for another independence vote

LONDON — The Scottish National Party won its fourth straight parliamentary election on Saturday and insisted it will push on with another referendum on Scotland's independence from the U.K. even though it failed by one seat to secure a majority.

© Provided by The Canadian Press

Final results of Thursday's election showed the SNP winning 64 of the 129 seats in the Edinburgh-based Scottish Parliament. The result extends the party's dominance of Scottish politics since it first won power in 2007.

Other results from Super Thursday's array of elections across Britain emerged Saturday, including the Labour Party's victory in the Welsh parliamentary election. Labour's Sadiq Khan was also reelected mayor of London.

The election with the biggest implications was the Scottish election, as it could pave the way to the break-up of the United Kingdom. The devolved government has an array of powers but many economic and security matters remain within the orbit of the British government in London.

Though the SNP won the vast majority of constituencies, it failed to get the 65 seats it would need to have a majority as Scotland allocates some by a form of proportional representation. Though falling short, the SNP will be easily able to govern for the five-year parliamentary term with the eight members of the Scottish Greens, who also back Scottish independence.

SNP leader and Scotland's first minister, Nicola Sturgeon, said her immediate priority would be steering Scotland through the coronavirus pandemic and that the legitimacy of an independence referendum remains, SNP majority or not.

“This is now a matter of fundamental democratic principle,” Sturgeon said. “It is the will of the country.”

U.K. Prime Minister Boris Johnson, the leader of the Conservative Party, would have the ultimate authority whether or not to permit another referendum on Scotland gaining independence. Johnson appears intent on resisting another vote, setting up the possibility of renewed tensions between his government and Sturgeon’s devolved administration.

The prime minister wrote in the Daily Telegraph newspaper published Saturday that another referendum would be “irresponsible and reckless” in the “current context” as Britain emerges from the pandemic.

He has consistently argued that the issue was settled in a September 2014 referendum, when 55% of Scottish voters favoured remaining part of the U.K. Proponents of another vote say the situation has changed fundamentally because of Brexit, with Scotland taken out of the European Union against its will. In the 2016 Brexit referendum, 52% of the U.K. voted to leave the EU while 62% of Scots voted to remain.

 

Video: Scottish independence back on the table in latest election (cbc.ca)

Duration 2:14

Sturgeon said it would be wrong for Johnson to stand in the way of a referendum and that the timing is a matter for the Scottish Parliament.

There's been growing talk that the whole issue may end up going to court, but Sturgeon said the “outrageous nature” of any attempt by the British government to thwart the democratic will of Scotland would only fuel the desire for independence.

“I couldn't think of a more powerful argument for independence than that,” she said.

The Scotland results have been the main focus since an array of local and regional elections took place Thursday across Britain, in which around 50 million voters were eligible to vote.

In Wales, the concluded vote count showed Labour doing better than expected as it extended its 22 years in control of the Welsh government despite also falling one seat short of a majority. Mark Drakeford, who will remain first minister, said the party will be “radical” and “ambitious.”

Ballots continue to be counted from local elections in England, which already have been particularly good for Johnson’s Conservative Party, notably its victory in a special election in the post-industrial town of Hartlepool for a parliamentary seat that Labour had held since 1974.

That win extended the party’s grip on parts of England that had been Labour strongholds for decades, if not a century. Many seats that have flipped from red to blue voted heavily for Brexit. The speedy rollout of coronavirus vaccines also appears to have given the Conservatives a boost even though the U.K. has recorded Europe's highest COVID-related death toll at 127,500.

For Labour's new leader, Keir Starmer, the Hartlepool result was a huge disappointment and has led to another bout of soul-searching in a party that in 2019 suffered its worst general election performance since 1935.

Starmer said he would soon set out a strategy of how it can reconnect with traditional voters. He hasn’t given details though is thought to be considering a rejig of his top team, starting off with removing his deputy, Angela Rayner, from her roles of party chair and campaign co-ordinator.

Though Labour is clearly losing ground in its traditional heartlands, its support held up in other parts of England, such as the big cities.

In London, Sadiq Khan won a second term in elections delayed by a year because of the pandemic. He secured 55.2% of the vote once second preference votes were counted, beating his Conservative rival Shaun Bailey got 44.8%. Khan's winning margin was down slightly on last time.

The party also won other mayoral races, including Steve Rotherham in the Liverpool City Region, Andy Burnham in Greater Manchester and Dan Norris in the West of England region, which includes the city of Bristol.

The Conservatives' Andy Street, meanwhile, was reelected as mayor of the West Midlands, which includes the city of Birmingham.

Pan Pylas, The Associated Press

Minister Garneau recognizes the essential contribution of seafarers on their international day Transport Canada 

AFTER WII DURING A SEAFARERS STRIKE ON THE ST LAURENCE SEAWAY IN 1949 THE LIBERAL GOVERNMENT OF THE DAY BUSTED UP THE LEFT LEANING CANADIAN MARITIME UNION BY BRINGING TO CANADA AN AMERICAN GANGSTER AND LABOR ORGANIZER HAL BANKS FROM A COMPETING AND MORE RIGHT WING UNION, THE SEAFARERS INTERNATIONAL UNION TOGETHER THEY BUSTED UP THE CMU. BECAUSE OF BANKS THE LIBERALS AND THE MOB HAD CONNECTIONS THROUGH OUT THE SIXTIES IN MONTREAL AND HAMILTON.

YOU WILL UNDERSTAND HOW HYPOCRITICAL THIS IS 

SEE BOTTOM FOR MORE INFORMATION 

OTTAWA, ON, June 25, 2020 /CNW/ - Each day, seafarers play an important role in the movement of goods and people and significantly contribute to the Canadian economy. Their commitment has probably never been greater than during the COVID-19 pandemic, since most of them have been spending even longer periods of time at sea, far from their loved ones.

In honour of the International Maritime Organization's annual Day of the Seafarer, the Minister of Transport, the Honourable Marc Garneau, is proud to recognize the essential role seafarers play, at home and abroad, in their contributions to maritime trade.

The theme to mark this year's Day of the Seafarer is "Seafarers are Key Workers." The Government of Canada applauds all seafarers in Canada and worldwide. They are indeed the key workers at the front lines, and they remain committed to the movement of people and the goods our country depends on, even during these challenging times.

As a maritime nation dependent on trade by sea, Canada remains a strong advocate for the safety and welfare of seafarers and maritime workers. Since the onset of COVID-19, the Government of Canada has continued to work closely with marine industry stakeholders to protect seafarers at sea and at ports.

Quote

"On this international Day of the Seafarer, I invite Canadians to join me in thanking the seafarers who make a real difference in our lives, every day. Even as we face a global crisis, they stepped up for us when we needed them the most—continuing to transport integral goods during the pandemic, and I am grateful for the essential work that they continue to do at home and abroad."

Minister of Transport
The Honourable Marc Garneau

Quick facts
In 2010, the International Maritime Organization, decided to designate June 25 as the International Day of the Seafarer as a way to recognize that almost everything that we use in our daily lives has been directly or indirectly affected by sea transport. This year, the annual Day of the Seafarer is celebrating its 10th anniversary.
The International Maritime Organization is the global, standard-setting authority for the safety, security and environmental performance of international shipping. Its main role is to create a regulatory framework for the shipping industry that is fair and effective, universally adopted, and universally implemented.
As a founding member, Canada has a long history of working with the International Maritime Organization to advance standards that promote maritime safety and security, protect the environment and safeguard seafarers.

Associated links

International Maritime Organization's Day of the Seafarer 2020

Stay connected

Follow Transport Canada on Twitter, Facebook, YouTube and Instagram.

This news release may be made available in alternative formats for persons living with visual disabilities.

SOURCE Transport Canada

For further information: Livia Belcea, Press Secretary, Office of the Honourable Marc Garneau, Minister of Transport, Ottawa, Livia-Marina.Belcea@tc.gc.ca; Media Relations, Transport Canada, Ottawa, 613-993-0055, media@tc.gc.ca
Related Links

http://www.tc.gc.ca/

HAL BANKS SEAFARERS INTERNATIONAL UNION GOVERNMENT OF CANADA 

Web results

HAL BANKS | Maclean's | MAY 18 1963 - The Maclean's Archive

https://archive.macleans.ca › article › hal-banks

Banks' SIU brought to the struggle a long history of violence in the Forties and Fifties, and ... Nearly all were members of the Canadian Maritime Union, Banks' only ... neither the I.ibera! government in power when he came nor the Conservative ...

Hal C. Banks - Wikipedia

https://en.wikipedia.org › wiki › Hal_C._Banks

An American with mob connections, he came to Canada in 1949 to help bust purportedly Communist-controlled shipping unions and establish the Seafarers International Union as their replacement.

Seafarers' International Union | The Canadian Encyclopedia

https://www.thecanadianencyclopedia.ca › article › seafarers-international-...

Seafarers' International Union In 1949, supported by the federal government and some ... Within a few months, Hal BANKS and the "goons" he brought with him, ...

American gangster in montreal the true story of hal c. banks ...

https://cpress.org › old › american-gangster-in-montreal-the-true-story-of-...

Instead Brittain focused on the Canadian government's involvement in Banks' impunity ... Hal C. Banks' Seafarer's International Union violently opposed the ...

UNION CONFIRMS BANKS HAS QUIT; Ousted Leader of SIU ...

https://www.nytimes.com › 1964/10/03 › archives › union-confirms-banks-h...

UNION CONFIRMS BANKS HAS QUIT; Ousted Leader of S.I.U. in Canada ... of Hal C. Banks from all his posts in the Seafarers International Union of North ... of the Canadian Government to help rid the maritime industry of the Canadian ...

HAL BANKS, 76, DIES; UNION OFFICIAL LED SEAFARERS ...

https://www.nytimes.com › 1985/09/27 › hal-banks-76-dies-union-official-le...

Sep 27, 1985 - As head of the 15,000-member Seafarers International Union of Canada, Mr. Banks played an instrumental role in organizing strikes against ...

Missing: GOVERNMENT ‎| Must include: GOVERNMENT

Everything That Floats: Pat Sullivan, Hal Banks, and The ...

https://www.umanitoba.ca › cmarchive › reveverythingfloats

Banks came to Canada at the request of the Seafarers' International Union to ... questions surrounding Banks, union corruption, and government involvement.

The 1949 Canadian Seamen's Union Strike

www.wfhathewaylabourexhibitcentre.ca › labour-history › the-1949-canad...

The story of the 1949 Canadian Seamen's Union (CSU) strike is an appalling story ... The CSU President advised the government: “We are quite prepared to see that ... The SIU sent in forty-year old, Iowa-born, Harold Chamberlain Banks (Hal ...

Communists, Gangsters, and Canadian Sailors - Labour / Le ...

www.lltjournal.ca › index.php › llt › article › download

by C Heron - ‎Cited by 4 - ‎Related articles

William Kaplan, Everything That Floats: Pat Sullivan, Hal Banks, and the Cana- ... International Union (SIU) became die most infamous embodiment of corruption in labour ranks that ... labour movements, the Canadian government complied.

Canada's sweetheart : the saga of Hal C. Banks (VHS tape ...

https://www.worldcat.org › title › oclc

Harold Chamberlain Banks, a convicted felon and union strongarm, was recruited ... replace them with a Canadian chapter of the Seafarers' International Union (SIU). ... This challenge resulted in the government-appointed Norris Commission ..

UPDATED
Wirecard Suspends Executive After $2.1 Billion Goes Missing

 Eyk Henning, Jan-Patrick Barnert and Sarah Syed

Bloomberg June 18, 2020


View photos
(Bloomberg) -- Wirecard AG has temporarily suspended its outgoing chief operating officer after revealing that auditors couldn’t find about 1.9 billion euros ($2.1 billion) in cash, spooking investors and casting doubt on the company’s leadership and survival.

Jan Marsalek has been suspended on a revocable basis until June 30, the company said in a statement on Thursday. James Freis, who had already been tapped to lead the company’s new “integrity, legal and compliance” department starting next month, will begin in his role immediately. Marsalek was due to step down from the COO role to a new position in charge of business development, Wirecard said in May.

The company suffered one of the worst stock slumps in the history of Germany’s benchmark index on Thursday after revealing that auditors had been unable to find billions of cash that was supposed to be held in Asian banks. The company warned loans of as much as 2 billion euros could be terminated if its audited annual report, delayed for the fourth time, was not published by June 19.

Marsalek had tried to get in touch with the two Asian banks and trustees over the past two days to recover the missing money, but wasn’t successful, according to a person familiar with the matter. It’s unclear if the funds can be recovered, the person added.

A representative for Wirecard didn’t respond to requests for comment. Marsalek couldn’t immediately be reached for comment.

Ernst & Young was unable to confirm the location of the cash in certain trust accounts, and there was evidence that “spurious balance confirmations” had been provided, Wirecard said in a statement on Thursday. That’s about a quarter of the consolidated balance sheet total, Wirecard said.

“We are stunned,” said Ingo Speich, a fund manager at Deka Investments, a top 10 shareholder at the firm. “A new start in terms of personnel is more urgent than ever.”

The escalating crisis also calls into doubt the future of Chief Executive Officer Markus Braun, who is the company’s biggest shareholder. Braun has been at the helm since 2002, building the company from a startup into a payment provider whose technology facilitates transactions around the world.

Braun painted the company as a potential victim in a separate statement. The CEO has been resisting calls to resign and aggressively defending the company against accusations of accounting fraud, led by a series of articles in the Financial Times.

“It is currently unclear whether fraudulent transactions to the detriment of Wirecard AG have occurred,” said Braun, adding that the company will file a complaint against unnamed persons.

The stock dropped as much as 67% to 35.85 euros in Frankfurt on Thursday, the biggest fall on record and the largest for a member of Germany’s prestigious 30-company DAX stock index. Wirecard’s bonds also suffered a record plunge.

Loan Issue

Wirecard warned loans up to 2 billion euros could be terminated if its audited annual report was not published by June 19. Analysts at Morgan Stanley estimated that Wirecard has available cash of around 220 million euros, if it cannot locate the missing $2.1 billion.

“While we would expect Wirecard to seek covenant waivers, if the banks call 2 billion-euros of debt and that is mostly drawn, then we expect investor focus to turn to the balance sheet and liquidity,” said analysts at Morgan Stanley in a note on Thursday.

Wolfgang Donie, analyst at NordLB, warned that the “overall situation at Wirecard can only be described as insupportable and the scandal is now becoming a crisis that is threatening the existence of the company.”

German financial markets regulator BaFin said it is examining Wirecard’s disclosure on Thursday as part of its investigation into whether the company violated rules against market manipulation, according to a spokeswoman.

In September 2018, Wirecard reached a market valuation of 24.6 billion euros, replacing Commerzbank AG in the DAX alongside titans such as Volkswagen AG, Siemens AG, and Deutsche Bank AG. Following Thursday’s collapse, the company is valued at around 6.7 billion euros.

“Wirecard’s retreat could be terminal,” said Neil Campling, an analyst at Mirabaud Securities.

Asian Banks

EY told Wirecard that their results will require additional audits after two unnamed Asian banks that have been managing the company’s escrow were unable to find accounts with about 1.9 billion euros in funds, Wirecard said in an additional statement. Those funds had been set aside for risk management, the company said.

Wirecard said last month that the latest delay in publishing results was due to Ernst & Young needing more time to finish its review, and that the auditor hadn’t found anything material within the scope of its work. Wirecard had previously postponed the results while it was working with KPMG on a probe into allegations about accounting irregularities.

Braun has aggressively fought against allegations that the company’s financials have been mismanaged. Braun has also resisted calls from activist investors TCI Fund Management Ltd. to step down, promising to regain investor confidence and improve compliance and control.

Wirecard headquarters were searched in May by German prosecutors as part of a probe involving the company’s senior management.

Wirecard said in February that full-year revenue rose about 38% to 2.8 billion euros while earnings before interest, taxes, depreciation and amortization jumped 40% to 785 million euros.

(Updated with Wirecard statement, CEO comment, context on loans.)

©2020 Bloomberg L.P.

Crypto Card Issuer Wirecard Says It’s Missing $2.1B in ‘German Enron’ Scandal

 Paddy Baker CoinDesk June 18, 2020


Former German blue-chip Wirecard has said a quarter of its total balance sheet is missing after “spurious cash balances” were provided to its auditor, EY.

In an explosive statement Thursday, the Munich-based card issuer, said a total of €1.9 billion ($2.1 billion) could not be accounted for and that some members of the company had purposefully filed false or misleading statements “in order to deceive the auditor and create a wrong perception of the existence of such cash balances.”

Wirecard admitted the accounting hole was roughly a quarter of the company’s total balance sheet.

A former poster child of the German tech scene, Wirecard has been heavily scrutinized over supposed irregularities in its accounting practices. The company was accused last year of fraudulently inflating sales and profit figures, and that it was using client funds held in escrow accounts to boost cash balances.

Wirecard’s share price has tanked. At press time, shares traded at the €36 (~$40) mark, down 70% since Wednesday. The credit card issuer had once been one of Germany’s most prestigious companies, even surpassing Commerzbank with a €24.6 billion( ~$27.6 billion) market valuation in September 2018.

Lionel Barber, former editor-in-chief of the Financial Times, said on Twitter that Wirecard was turning into a German version of the Enron scandal.

Wirecard subsidiary Wirecard Card Solutions branched out into crypto when it became the issuer for crypto payment card providers Crypto.com and TenX. Wirecard had also partnered with TON Labs, the developer house behind Telegram’s blockchain. A court document also claimed Wirecard’s COO participated in the $1.7 billion token sale in 2018.

It’s unclear if Crypto.com, which only rolled out is payment card in Europe last month, is planning on switching its card issuer. CoinDesk reached out for comment but hadn’t heard back by press time.

Wirecard had already delayed the release of its audited financial statements and Thursday was supposed to be the final publication date. Today’s news has now pushed this back indefinitely. The delay means creditors will be able to pull up to €2 billion (~$2.2 billion) worth of loans as of Friday.

Wirecard’s board is now working “intensively” with EY “towards a clarification of the situation.”

 German payments firm Wirecard and its missing billions

Reuters June 18, 2020

(Reuters) - Billions of euros of loans to Wirecard could be called in as early as Friday after the German payments company said its auditor had refused to sign off on its 2019 accounts, knocking more than half the value off its shares on Thursday.

Wirecard said that its auditor EY had informed it that sufficient evidence could not be found for 1.9 billion euros ($2.1 billion) in cash balances on trust accounts - or around a quarter of its balance sheet total.

Following are some key facts about the company and pivotal dates in its recent history:

* Founded in 1999, Munich-based Wirecard has 5,800 employees in 26 countries around the world. It processes digital payments for both consumers and businesses and reported revenues of more than 2 billion euros ($2.3 billion) in 2018, more than triple the figure in 2014.

* Wirecard's expansion was driven by its chief executive and leading shareholder Markus Braun, an Austrian who has led the company since 2002. It was promoted to Germany's blue chip index in September 2018 when it ousted Commerzbank.

* In Feb. 2019, Singapore police said they were looking into reports by the Financial Times of alleged financial irregularities at Wirecard's local office, allegations that had driven its shares sharply lower.

* In Oct. 2019, Wirecard rejected any impropriety after the Financial Times published documents on the company's accounting practices which it said appeared to indicate an effort to inflate sales and profits.

* An independent investigation by auditor KPMG published in April this year found Wirecard did not provide sufficient documentation to address all allegations of accounting irregularities made by the Financial Times.

Wirecard said the KPMG audit had not uncovered any incriminating evidence to support allegations it manipulated its accounts and it would not restate its accounts for the years 2016 through 2018.

* On June 5, Munich prosecutors said they had searched Wirecard's headquarters and opened proceedings against the payment company's management board as part of a market manipulation probe initiated by financial regulator BaFin.

Prosecutors said the company was suspected of having issued misleading information which may have impacted Wirecard's share price between March 12 and April 22.

($1 = 0.8885 euros)

(Editing by Keith Weir and Alexander Smith)

Wirecard shares plunge after saying auditor can’t find billions of missing cash

Published: June 18, 2020 By Steve Goldstein

The headquarters of the technology and financial services company Wirecard in Aschheim near Munich, Germany, on September 18, 2018. 

Referenced Symbols
WDI
-66.35% WCAGY
+5.27% DAX
-1.13%

Shares in Wirecard lost two-thirds of their value as the German payment processor said on Thursday its auditor can’t find evidence for a quarter of the cash on its balance sheet.

Wirecard WDI, -65.97% WCAGY, +5.27% shares lost 65% as the firm said Ernst & Young said it didn’t have sufficient audit evidence for €1.9 billion euros in cash.

“There are indications that spurious balance confirmations had been provided from the side of the trustee,” the company said.

“Previously issued confirmations by the banks were no longer recognized by the auditor. All parties involved are endeavoring to clarify the matter as quickly as possible,” said Markus Braun, Wirecard chief executive, in a statement. “It is currently unclear whether fraudulent transactions to the detriment of Wirecard AG have occurred.”

Wirecard said the banks managing the escrow accounts are two Asian banks that have investment grade ratings. The trustee, who has been in office since 2019, holds numerous mandates in Asia, Wirecard said.

The DAX DAX, -1.12% component postponed its 2019 annual financial statements for a fourth time, and if not completed by Friday, some €2 billion of loans can be terminated.

It is the latest twist in a long-running saga. The Financial Times reported in October that Wirecard staff appeared to have conspired to fraudulently inflate sales and profit at subsidiaries. Wirecard has denied those charges, while KPMG has conducted a special investigation and said it couldn’t prove the revenue of its third-party acquiring business.

“Even today Wirecard’s long standing CEO Marcus Braun has brazenly tried to portray the company as a victim of fraud and instead tried to focus investors on apparently strong reported revenue growth,” said Barry Norris, manager of the Argonaut Absolute Return Fund, who said the stock was his biggest short position. “During our first-quarter conference call we previously described the company as ‘having more red flags than you would see at a communist rally.’”

Wolfgang Donie, an analyst at NordLB, cut the stock’s rating to sell from hold, and his target price to 20 euros from 80 euros, saying the new allegations are leading to an “existential crisis.”

Germany’s stock-market regulator separately is investigating Braun over insider-trading allegations. Braun held 7% of the stock, according to FactSet data, making him the largest shareholder







Wirecard Bet Hammers Star U.K. Stock Picker

Suzy Waite and Lucca de Paoli
Bloomberg June 18, 2020




(Bloomberg) -- Star U.K. stock picker Alexander Darwall’s investment trust slumped as its biggest holding went into freefall amid accounting concerns.

Wirecard AG accounted for just over 10% of the European Opportunities Trust Plc’s investments as of May 31, according to the website of Devon Equity Management, where Darwall is chief investment officer.

When the German payments firm delayed the release of its annual report for a fourth time on Thursday, shares in Darwall’s trust fell 11.6%. That was the biggest daily drop since 2008.

Devon’s Chief Executive Officer Richard Pavry declined to comment.

Darwall built his reputation over almost a quarter century at Jupiter Fund Management Plc, where he at one time managed nearly 8 billion pounds ($10 billion) focusing on large bets on European firms. Many of his vehicles were heavily invested in Wirecard, which had proven to be a profitable wager for the manager. In the 10 years before Darwall left Jupiter, the German firm’s share price surged from 6 euros to around 150 euros.

Wirecard stock dropped by a record 62% in Frankfurt on Thursday after auditors were unable to find about 1.9 billion euros ($2.1 billion) in cash, causing analysts to question liquidity at the German payments firm.

In January, Darwall apologized to investors of the trust about its large stake in Wirecard, and said at the time he would not have out-sized positions in any stock in the future. He also reiterated his confidence in the stock, despite a number of reports questioning the accounts of the growing business.

Investors pulled 4.5 billion pounds from Jupiter in 2019, which CEO Andrew Formica said was “almost entirely” because of Darwall’s decision to leave. His departure was announced in July last year.

(Updates with closing share prices in 3rd and 6th paragraphs)

©2020 Bloomberg L.P.

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https://plawiuk.blogspot.com/2020/06/wirecard-committed-elaborate-and.html

https://plawiuk.blogspot.com/2020/06/wirecard-fights-for-survival-as.html