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Wirecard has for the first time acknowledged the potential scale of a multiyear accounting fraud, as the German fintech group warned that €1.9bn of cash on its balance sheet probably does “not exist”.

The payments company said it had previously mischaracterised its biggest source of profits and that it was now trying to work out “whether, in which manner and to what extent such business has actually been conducted for the benefit of the company”. It withdrew its most recent financial results and said other years’ accounts may be inaccurate.

As Wirecard’s shares resumed their precipitous fall — down 33 per cent on Monday and more than 80 per cent since the collapse began on Thursday — the German establishment began its own reckoning.

Felix Hufeld, the president of German financial watchdog BaFin, said the Wirecard scandal was “a complete disaster” and “a shame” for Germany — a market that “should be governed by quality and reliability”. But he defended a two-month short-selling ban the regulator imposed last year after Wirecard’s Asia headquarters were raided by Singapore police.

The collapse in Wirecard’s share price has wiped out hundreds of millions of dollars of paper profits for a group of SoftBank executives and an Abu Dhabi sovereign wealth fund, who earlier stood to gain handsomely from an intricate $1bn bet on the German payments company’s stock. (FT)

Coronavirus digest

  • Donald Trump will extend a suspension of immigration into the US imposed in response to the pandemic, banning green card applications for the rest of the year and introducing restrictions on other visa categories.

  • Delta Air Lines plans to resume flights to China this week, the first US air carrier to do so.

  • A Chinese citizen journalist has been formally charged after being arrested for posting a video critical of the government’s Covid-19 response.

  • Saudi Arabia will hold a ‘very limited’ Hajj because of the pandemic, restricting the pilgrimage to people already living in the kingdom.

  • New York City opened on Monday for outdoor dining, shopping, haircuts — and even some office work.

  • The UK government is drawing up plans to offset the cost of support for the tourism sector as lockdown restrictions ease. (FT, China Media Project, Al Jazeera, AP)

The director of the US Centers for Disease Control and Prevention spoke to the FT amid accusations that America’s disease-fighting agency has been undermined by the Trump administration. Follow our live coverage.

In the news

Japan rushes UK to agree first post-Brexit trade deal Tokyo has given the UK just six weeks to strike a post-Brexit deal, putting Boris Johnson’s government under pressure to agree one of the fastest trade negotiations in history — and Britain’s first in more than 40 years. (FT)

US designates four Chinese media outlets as foreign missions US state department designated CCTV, China News Service, the People’s Daily and Global Times as government foreign missions, claiming they produced propaganda for the Chinese Communist party rather than providing legitimate news services. (FT)

The Global Times and CCTV are among four Chinese media outlets that have been designated ‘foreign missions’ by the US © AFP

EU-China virtual summit European and Chinese leaders clashed over geopolitics and economics when they spoke via video on Monday. Disagreements centred on efforts to restrict Hong Kong’s autonomy, coronavirus disinformation and Beijing’s curbs on foreign investors, Brussels officials said. Meanwhile, the US envoy for arms control taunted China for its absence from talks in Vienna. (Bloomberg, Reuters)

Indian and Chinese officials discuss border dispute Military officials from both countries met on the Chinese side of the Line of Actual Control on Monday to discuss the border stand-off. The meeting is the first since 20 Indian soldiers were killed by Chinese troops last week. (Hindustan Times)

US Supreme Court limits SEC’s power The court in an 8-1 decision said the US securities regulator could only obtain a sum reflecting the net profits of a scheme, not the total amount taken from investors, narrowing the commission’s ability to claw back ill-gotten gains through federal lawsuits. (FT)

Apple’s conflict with developers escalates The company’s annual Worldwide Developers Conference — where attendees used to pay $1,600 for a rock concert-like experience — has been marred by both the coronavirus and disputes from third-party developers which allege the company wields a monopoly power. Here are the biggest announcements from Monday’s conference. (FT, The Verge)

Berlin and ECB signal end to legal impasse over bond-buying Germany’s finance minister has said the stand-off between the country’s highest court and the European Central Bank is about to be resolved “without drama”, adding to signs that a solution could be found as soon as this week. (FT)

Astrid Wallrabenstein is sworn in as a new judge of Germany’s constitutional court at a ceremony in Berlin on Monday © Bernd von Jutrczenka/Pool/AFP/Getty

Chinese bonds soar in popularity abroad Onshore Chinese bonds bought by foreigners more than doubled in May, according to the State Administration of Foreign Exchange. Meanwhile, the country’s banks reported a 61 per cent increase in foreign exchange trading, suggesting a growing willingness to convert US dollars into yuan. (SCMP)

The day ahead

John Bolton’s book publishes After a last-gasp attempt by the US justice department to prevent the publication of the former national security adviser’s book failed, The Room Where It Happened will publish Tuesday. In a scathing interview on Sunday, Mr Bolton said the president posed “a danger for the republic”. (FT)

What else we’re reading

India picks a side in the new cold war Until now, the Indian government has tried to avoid choosing sides in the antagonism between Washington and Beijing, writes Gideon Rachman. But since last week’s border clashes, there is now near-consensus in the Indian policymaking elite that China is a hostile power. (FT)

© James Ferguson

Coronavirus corporate losers . . . The companies hardest hit by Covid-19 fall into roughly four categories: those felled by social distancing, such as airlines; heavy industrials, which have suffered falling demand and supply; energy, facing too much supply; and financials affected by plummeting interest rates. Don’t miss our look at 100 companies that have prospered. (FT)

 . . . And one big winner Malaysia-based Top Glove is one of the fortunate few to be making products that are now in the highest demand. The company’s main challenge has been to keep its 44 factories running 24 hours a day, seven days a week, to meet soaring orders for medical gloves. (FT)

The problem with Big Food Big Food is fast on its way to surpassing Big Tech as the world’s most politicised business, writes Rana Foroohar. There is little that is more essential to life than agricultural production. But food security is a term that was, until recently, used only in developing countries. (FT)

© Matt Kenyon

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Cashing in on retail trading boom Citadel Securities and its majority owner Ken Griffin are among the big winners from a boom in retail investing, cashing in on the zero-fee trading that has lured huge numbers of first-time investors to the US stock market. And there’s evidence these day traders are even outperforming the professionals. (FT, Axios)

The looming transatlantic trade war Amid squabbles that include digital taxes, food, gas and cars, both the EU and the US are being unreasonable. Henry Kissinger famously quipped about the Iraq-Iran war: “It’s a pity they can’t both lose.” I feel the same here, writes Wolfgang Münchau. (FT)

Supreme Court’s ‘Dreamers’ decision just a first step Young immigrants granted status under Daca need a path to US citizenship, writes Jacqueline Bhabha, Harvard University professor. Thousands of “Dreamers” have suffered from crushing anxiety because of the insecurities associated with their status. (FT)

Daca recipient Luis Zuluaga celebrates outside the Supreme Court © Reuters

How to get ahead in the (home) office Clever people have figured out how to look busy and stay in the workplace politics loop. Having watched them in action, Pilita Clark shares what she’s picked up. With the new-found freedom of potentially indefinite remote work, there are a few things to consider before making a big move. (FT, WSJ)

Podcast of the day

The inequalities at the heart of city life FT correspondents talk about how the coronavirus pandemic has laid bare the health inequalities in many of the world’s great cities and what can be done to address these problems.

Send your recommendations and feedback to [email protected].



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