In his position as senior legal counsel for online payment company Wirecard’s Asia Pacific region, Pav Gill tried to clean up suspected corruption. Instead of being praised for his efforts, he became the target of aggressive intimidation tactics from senior management.

After leaving the company, he provided the Financial Times with the information that eventually exposed the biggest accounting fraud Germany had seen for a generation.

Wirecard was a German financial services company that claimed to have revolutionalised the payments industry, allowing purchases to be made online almost instantaneously anywhere in the world while taking a small cut of each transaction. To the unsuspecting eye, it looked like a rare German fintech success story, the country’s answer to Silicon Valley.

The company grew rapidly from its beginnings in 1999. From an initial focus on payments in the adult entertainment and online gambling industries, Wirecard expanded into the mainstream and managed to establish a global presence by aggressively acquiring companies abroad. Wirecard had major offices in Dubai and Singapore as well as in Munich.

By 2018 Wirecard was listed on the DAX index of Germany’s 40 leading companies. But, unknown to most of its 6000 employees and the many small investors who put their life savings into the company, Wirecard’s staggering profits were built on fake contracts and falsified invoices. The end came in the summer of 2020, when the company announced it was 3.2 billion Euro in debt and filed for insolvency. An amount of 1.9 billion Euro in cash, about a quarter Wirecard’s balance sheet, simply did not exist. Senior figures at the company are now in custody, awaiting trial. Others are on the run.

In reality, informed observers had been asking questions about Wirecard’s business records for some time, but the company had proven adept at intimidating its critics through legal and extra-legal means. Wirecard would engage surveillance companies to follow those who asked awkward questions and accuse them of trying to manipulate the share price for their private benefit. Germany’s regulators sometimes seemed dazzled by Wirecard’s success and prioritised investigating the company’s critics over assessing their claims.

It was the FT’s reporting that finally brought down Wirecard. But that day was a long time coming, and without Pav Gill’s contribution, it might never have arrived. The Wirecard story was a difficult one to report on.

The Wirecard story was a difficult one to report on. Journalists at the FT had been following it for the best part of a decade and had long been suspicious of the company’s accounting practices, with annual statements followed by frequent adjustment announcements. A series of articles on the FT’s Alphaville blog looked at the accounts in detail, and in 2016, covered the 101-page Zatarra Report authored by two anonymous investors. The report accused Wirecard of facilitating payments to gambling websites from people based in the US, something that was illegal at the time.

Wirecard responded to these allegations extremely aggressively and hired private investigators to go after the Zatarra Report’s authors, who would receive intimidating messages and even home visits. Germany’s financial regulator, BaFin, and Bavarian public prosecutors also opened investigations into alleged market manipulation by the report’s authors, while appearing uninterested in the allegations they had made about Wirecard itself.

The FT and its journalists also received threats from Wirecard’s lawyers as well as less conventional responses. Wirecard executives sent messages to the journalists, identifying one of their sources. There were also suspicions that Wirecard executives were deliberately trying to feed false stories to the FT in order to make its reporting look unreliable. A fake document dump released online appeared to include journalists’ private emails and was followed by another round of legal letters from UK libel lawyers. This combination of legal and surveillance threats meant that publications were obliged to take a cautious approach to their reporting on the company.

The breakthrough required the contribution of whistleblower Pav Gill, who put himself at considerable risk by speaking out. Gill was an in-house lawyer at Wirecard in Singapore, with responsibilities over the Asia-Pacific region. He had tried to draw attention to suspected fraud reported to him by colleagues. The company’s profit figures for the region just didn’t add up. Pav saw his role as bringing this local issue to the attention of the company’s management in Munich.

The situation was worse than Pav had anticipated. Together with two colleagues in compliance roles, Pav had brought a Singapore legal firm on board to conduct an independent investigation. Within a couple of weeks, that investigation had found evidence of falsified invoices and systematic fraud in Wirecard’s international operations. It soon became clear that Wirecard’s leadership in Germany was not going to treat these allegations as a normal compliance issue. The reaction of Wirecard’s Munich-based board was to put Jan Marselek, the main figure implicated in the probe, in charge of it.

Pav Gill had been working at Wirecard for less than a year and had reason to believe that his life was in danger. He was forced to leave Wirecard in October 2018 but kept possession of incriminating information that would be invaluable to anyone investigating the company. It was Gill’s mother who first got in touch with a trusted journalist, Clare Rewcastle Brown. Bia Brown, Gill was put in touch with the FT and other media organisations including Suddeutsche Zeitung. He was reluctant to reveal his identity at first, not least because he felt he and his mother were at risk of surveillance or worse.

The FT published their story about the Singapore investigation in early 2019, following months of work in secure conditions to minimise the chances of Wirecard surveillance. In response to the story, the German financial regulator again took Wirecard’s side, suspending short-selling of the company’s stock and, shockingly, initiating an investigation into Dan McCrum and Stefania Palma, the two journalists bylined on the FT’s reporting. Nevertheless, after follow-up stories that demonstrated that a significant proportion of the company’s business was fraudulent, Wirecard finally collapsed in June 2020.

The affair illustrates the scale of the difficulties facing investigative journalists when the subject of their reporting has significant resources. Reporting on Wirecard required publications to stand up to legal threats like SLAPPs as well as less formal types of intimidation. The story also demonstrates the essential role that whistleblowers play in supplying information that makes it possible to publish. In turn, journalists need to be able to protect their sources in order to give them the security to come forward.

Wirecard may be no more, but the affair poses some very difficult questions for Germany’s regulators. . Wirecard was the first company listed on the DAX to file for insolvency, and the company’s problems might have come to light a lot sooner had the German financial regulator, BaFin, taken a more critical attitude towards allegations against the company. Instead, the German regulators appear to have taken some extraordinary actions in Wirecard’s defence – for reasons that are still not clear.

Congratulations Pav Gill, winner of 2021 Blueprint for Free Speech Special Recognition Award.