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Whistleblower’s tale could tilt cyber libel case in PH company favor

New information has come to light that could bolster a Philippine outfit’s case against a Financial Times journalist over an article involving German fintech company Wirecard. 

That Philippine firm, Conepay International Inc., which a March 19, FT article alleged is “one of more than a dozen curious companies identified during a Financial Times investigation” allegedly colluding with Wirecard’s Singapore subsidiary in alleged accounting irregularities, filed a cyber libel case against the FT article’s authors, Dan McCrum and Stefania Palma.

The said article was part of a series of reports penned by McCrum for FT. The articles had accused the German firm of fraud and accounting irregularities, which caused the company to lose nine billion euros in market value early this year.

Conepay, in its case filed at the Cabanatuan City Prosecutor’s Office in Nueva Ecija earlier this month, said the FT article had damaged the company’s reputation and business.

The article also “served no other purpose but to malign and defame the good name and good will of Conepay,” the complaint also said.

Investigators for Conepay have found out that one of the defendants, McCrum, was identified by a whistleblower to have ties with short-sellers who had allegedly manipulated Wirecard’s share price in 2016.

Short selling is a trading strategy that allows investors or traders to speculate on falling share prices.

In 2016, a previously unknown and now-defunct website named “Zatarra” had published a lengthy negative report about Wirecard, alleging accounting irregularities and that most of Wirecard’s revenues actually originate from payment processing for adult entertainment and gambling websites.

BaFin, the German financial regulator, had also filed last month a criminal complaint against two unidentified FT journalists and several short sellers for potential market manipulation over the reports.

The whistleblower, who had initially revealed the identities of short sellers Fraser Perring and Matthew Earl as the individuals behind Zatarra, had also revealed how internal discussions within Zatarra made multiple references to (sic) “default in 6 to the FT” for publication of their allegations and consulting with McCrum on how to best structure their publication.

The leaked communication within Zatarra also included quotes such as “trade plan is reliant on media coverage” or a journalist asking Matthew Earl “anything else you wanted to add” when discussing the journalist’s recent article about Wirecard.

According to the whistleblower, Zatarra had become defunct after a fallout between Perring and Earl, which ultimately resulted in Earl establishing his own company. Discussions between the two had included incriminating statements such as “When you […] excluded me and then the journalist, I knew it was game over. Not paying me, (sic) isn’t the icing on the cake, its (sic) a complete insult. Without any publication you’d have made ZERO.”

The decline in Wirecard’s share price in 2016 prompted German public prosecutors to issue on December last year a penalty order seeking to fine Perring and other short sellers for illegal market manipulation through false reports and deliberately negative press coverage.

A representative for Conepay who refused to be identified said the information about McCrum’s relationship with short sellers could help tilt the judgment in their favor.

“This new information sheds light on what seems to be an orchestrated attack on Wirecard and its partners in Asia. We are more optimistic that the law would judge in our favor after seeing that Conepay has been an unfortunate casualty in an unscrupulous bid for massive profit,” the representative said.

“Since 2016 it is clearly revealed that certain media played a paramount role in short selling attacks against Wirecard and now their partners in the Philippines. The role of McCrum has been described by evidence through email communications of Zatarra and yet he continues to publish articles with the same intent. As a legitimate company we will not be passive spectators as tainted journalists cast aspersions on our reputation,” the representative further said.

Topics: Financial Times , Wirecard , Conepay , Dan McCrum
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