January 23, 2018 / 6:35 PM / in 7 months

Wirecard rejects report on India business that hit stock

BERLIN (Reuters) - German payment processor Wirecard (WDIG.DE) rejected a report on Tuesday that was critical of its acquisition of an Indian payments business in 2015, reiterating its 2018 profit outlook and saying the unit was performing better than expected.

Wirecard said in a statement emailed to Reuters that it rejected the report, adding that the full price for the takeover had been paid out. It also said that there had been no writedowns in connection with the Indian transaction.

It said the business was exceeding the expectations of management at the time of the acquisition.

Wirecard's stock was hit earlier on Tuesday by the report by the Southern Investigative Reporting Foundation (SIRF) that questioned Wirecard's acquisition of the GI Retail Group for an initial stated purchase price of 230 million euros. (bit.ly/2BmCGTX)

In 2016, Morgan Stanley research suggested GI Retail had a more limited footprint than the company had indicated.

Munich prosecutors said on Tuesday they were extending an investigation into suspected market manipulation of Wirecard’s stock after the latest report.

The shares closed 3.7 percent down, having earlier dropped as much as 8 percent.

The initial investigation was launched in 2016 after the stock took a battering from short-sellers when previously unknown Zatarra Research accused the company of misleading accounting and fraud, charges Wirecard has strongly denied.

On Tuesday, Wirecard reiterated a forecast given in December for earnings, before interest, taxation, depreciation and amortisation (EBITDA) of 510 million euros to 535 million euros for 2018.

Reporting by Joern Poeltz, writing by Emma Thomasson. Editing by Jane Merriman and Adrian Croft

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