Trouble at one of its key holdings has roiled shares in the highly-rated European Opportunities (JEO) this week.
Shares in the trust, managed by Alexander Darwall, dived 11.5% yesterday to 687p on news that auditors to German mobile payments company Wirecard had refused to sign off on its annual accounts due to a €1.9bn ‘black hole’ in its finances.
Darwall has been a longstanding holder of Wirecard, which was the trust’s biggest position at 10.3% before yesterday’s news wiped 60% off its share price in Frankfurt.
Wirecard shares have halved again this morning, taking the share price from €104 on Wednesday to below €20, after two Philippine banks denied that they were holding the missing funds or that Wirecard was a client.
Compounding the company’s problems, if the missing cash can’t be located and the accounts aren’t published today, €2bn of loans will be terminated.
Darwall had been a vocal backer of Wirecard despite lingering concerns over its finances going back as far as 2016 when research firm Zatarra posted a report suggesting the company's accounts were fraudulent.
The Financial Times launched its own lengthy investigation into Wirecard and also found serious irregularities in the firm’s reporting.
European Opportunities sold out of its position in Wirecard yesterday following the revelation of the missing funds, leading to a 6.7% rebound in the shares today to 733p.
Luckily for shareholders in Jupiter’s European and European Growth funds, new managers Mark Nichols and Mark Heslop, recruited last year from rival asset manager Columbia Threadneedle, sold out of Wirecard shares shortly after taking over.
Wirecard chief executive Markus Braun admitted today: ‘It cannot be ruled out that the company has become the aggrieved party in a case of fraud of considerable proportions.’
