SUMMARY
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German stock exchange operator Deutsche Boerse on Wednesday, August 12, announced that it will tweak its rules in order to quickly expel scandal-hit payments firm Wirecard from the prestigious DAX 30 index following its insolvency.
Under the new rules, “insolvent companies shall be removed from the DAX selection indices with two trading days’ notice,” Deutsche Boerse said in a statement.
“Given the current situation, these rule changes would apply to Wirecard AG,” it added.
The change will take effect on August 19 and be implemented two days later, making August 21 Wirecard’s final day on the blue-chip DAX.
The digital payments provider, once a rising star in the booming fintech sector, collapsed spectacularly in June after admitting that 1.9 billion euros ($2.2 billion) missing from its accounts did not exist.
It became the first ever DAX 30-listed company to file for insolvency and several Wirecard executives including ex-chief executive officer Markus Braun have been arrested on fraud suspicions.
The revelations have sent Wirecard’s stock plunging from more than 100 euros per share to around 1.60 euros, giving it a far lower market capitalization than other DAX 30 members and turning its continued listing into an embarrassment for the Frankfurt stock exchange.
But under the previous rules, Wirecard would have had to wait until the next scheduled review of the composition of the DAX to be booted out.
The next review is not until September 3.
The decision to kick out insolvent companies “at short notice” in the future was overwhelmingly backed in a survey of market participants, Deutsche Boerse said.
Berlin-based food delivery company Delivery Hero is widely tipped to take Wirecard’s spot in the DAX 30. – Rappler.com
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