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ESG: The next big fraud?

Megan Boxall examines what 2021 could reveal when the tide washes out
ESG: The next big fraud?
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Is there a greater corporate red flag than management who refuse to answer valid investor questions about the longevity of the business over which they preside? Those that are happy to send out PR representatives when pesky journalists come calling, but cannot find the time to explain how they plan to spend investors’ cash to grow the business.

A carefully engineered management smokescreen was chief among the sins that contributed to the eventual unravelling of Wirecard earlier this year. When a Financial Times investigation in early 2019 found that an executive in the payment processor’s Asia-Pacific division had been suspected of using forged contracts, management plagued the journalists with legal threats and allegations of collusion. In June 2020, those journalists were vindicated when Wirecard’s auditor admitted that it could not locate €1.9bn of cash. 

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