Wirecard sues the FT for 'unethical reporting,' but shares sink after Singapore raid

Key Points
  • German payments firm Wirecard said it was taking legal action against the Financial Times for "unethical reporting."
  • Singapore police raided Wirecard's office in the city state on Friday, according to Reuters.
  • Wirecard shares plunged 10 percent following the news.
Markus Braun, CEO of the technology and financial services company Wirecard, poses in the company headquarters in Aschheim near Munich, southern Germany, on September 18, 2018. (Photo by Christof STACHE / AFP) (Photo credit should read CHRISTOF STACHE/AFP/Getty Images)

Wirecard shares tumbled 10 percent Friday after Singapore police reportedly raided the firm's offices.

Shares of the German payments firm had traded higher earlier in the day after it announced it was taking legal action against the Financial Times for "unethical reporting" into its accounting practices.

The FT has published three articles alleging fraud and misconduct in Wirecard's accounting practices. In a statement released Friday, Wirecard said it was taking legal actions against the news publication for its "unethical reporting."

"In the article published yesterday (Thursday), Wirecard employees are slanderously prejudged with unproven and false allegations. We will use all available legal means to protect the company and in particular our employees and their personal rights," the statement said.

The Financial Times was not immediately available for comment when contacted by CNBC.

One of the reports on Thursday described a pattern of "book-padding" at the firm's Singapore office with reports on Friday morning saying that its offices in the island city-state had been raided by the authorities.

"Police confirm that we have raided the premises of the Wirecard entities in Singapore," a spokesperson for the Singapore Police Force told CNBC Friday.

Meanwhile, a prosecutor in Munich launched a probe on potential market manipulation into Wirecard, Reuters also reported on Friday.

The FT's first investigation, published on January 30, said a senior Wirecard executive used forged and backdated contracts, possibly to inflate revenue. The report sent Wirecard shares tumbling nearly 20 percent in one day.

Wirecard called the original report "false, inaccurate, misleading and defamatory."

The German firm has been praised as a European fintech success whose valuation at one point surpassed Deutsche Bank's. As of Friday, Wirecard's market cap was roughly $14 billion.

What is fintech?