A week before Wirecard fell apart in June 2020, the hunt for €1.9bn in cash appeared to be gathering pace.
The payments group’s auditor EY had demanded cast-iron proof of Wirecard’s claim that it had the amount at two Philippine lenders, Bank of the Philippine Islands (BPI) and BDO Unibank.
Hard evidence that the money existed was the biggest obstacle between Wirecard and a clean bill of health from EY, a potential lifeline for the group by then under siege over its accounting.
As shareholders awaited sign-off on Wirecard’s annual results, the group’s chief operating officer Jan Marsalek was engaged in a set of frantic exchanges with an email account bearing the name of a Mark Tolentino, which is the name of a Manila-based lawyer who the German company had told EY was its trustee in the Philippines, overseeing cash in local bank accounts on its behalf.
On June 17 2020, an email from the account stated: “I am currently driving to the BPI headquarters . . .[and am] on the phone with the bank.”
Marsalek fired back 24 hours later: “Frankly, the current situation is extremely disconcerting! Please call me!”
A flamboyant lawyer, businessman, early supporter of Philippine president Rodrigo Duterte and unlikely YouTube star, Tolentino denies having been Wirecard’s trustee.
His Manila office doubles as a studio, where he dispenses legal advice on a channel popular enough to have earned him a plaque the Californian company awards anyone who reaches 100,000 subscribers.
Days after the Marsalek emails, Wirecard filed for insolvency after revealing that the €1.9bn in cash did not exist. The corporate fraud is now under investigation by Munich prosecutors and at the centre of a probe by Germany’s parliament.
Prosecutors believe that Marsalek was one of its architects, suggesting his emails were written knowing the €1.9bn was imaginary. A lawyer for Marsalek declined to comment.
‘That’s not my email address’
The email exchanges, which were submitted by Wirecard’s administrator to the parliamentary probe and seen by the Financial Times, show how the Philippines was suddenly thrust centre stage during the death throes of a company that for years was championed as a rare German tech success.
They also raise questions over the role of Tolentino. When the FT visited Tolentino at his Manila offices at the end of February, he described himself as a “victim” in the Wirecard scandal. Shown the email exchanges with Marsalek, he said: “It’s the first time I’ve seen these. That’s not my email address.”
A video uploaded on his YouTube channel, however, features the email address, email@example.com, which appears in the exchanges with Marsalek. Tolentino did not respond to a request for comment on the email address appearing in the video.
On the only other occasion he spoke to the FT shortly after Wirecard’s failure last year, Tolentino said he was “not the trustee of Wirecard”, had “never signed any document” with the group and accused the disgraced company of “identity theft”.
That account is at odds with KPMG’s special audit into Wirecard. The findings, published in April 2020, increased the pressure on EY to find irrefutable proof the €1.9bn was real.
The appendix to the audit, which remains unpublished but has been seen by the FT, details a meeting at Tolentino’s office in March 2020 with representatives from KPMG, EY and Wirecard at which the lawyer reportedly said his firm had opened bank accounts at BPI and BDO on behalf of the payments group.
Tolentino told the FT that he met “prospective clients” who spoke German — including someone he described as “the boss” and people he thought were his accountants — in February or March 2020 after they lined up outside his office. He declined to elaborate, citing attorney-client privilege.
From seafood to Covid vaccines
Almost a year on from Wirecard’s downfall, Tolentino is expanding his own eclectic portfolio of roles.
“I’m 20 per cent lawyer and 80 per cent businessman,” Tolentino told the FT at his office. His business interests include exporting seafood and what he said was the upcoming release of a hand sanitiser.
He recently became the chief executive of MKG Universal Drugs Trading, which he claims will be the exclusive business-to-business distributor of China’s Sinopharm Covid-19 vaccine in the Philippines once the jab has secured the necessary authorisation.
The vaccine was at the centre of a controversy after some of Duterte’s security personnel received doses last year from a batch smuggled into the country.
The furore appears to have done little to cool Tolentino’s own political ambitions, which are centred on a new organisation linked to Manny Pacquiao, a national boxing hero who is now a senator.
It was in his capacity as a lawyer that Tolentino appears in the final, frenzied months of Wirecard’s existence.
Until late 2019, the purported €1.9bn was believed to have been held in accounts at OCBC, the second-largest bank in Singapore, with a local company, Citadelle Corporate Services, apparently acting as trustee and supplying EY with confirmations the money existed.
A change of trustee
According to the appendix of the special audit, Tolentino told KPMG that in November 2019 he signed a contract with Citadelle transferring trustee responsibilities for Wirecard to him. Citadelle had recommended him to the payments group, the appendix says.
Citadelle director R Shanmugaratnam has been charged with falsification of accounts in Singapore and has yet to submit a plea. Through his lawyer he declined to comment, citing the proceedings against him.
OCBC did not have a banking relationship with Wirecard and Citadelle did not have an escrow account, according to a person familiar with the matter. OCBC declined to comment.
In March 2020, BDO and BPI were sent balance confirmation requests featuring an “MK Tolentino Law Office” letterhead, according to documents seen by the FT.
When shown the documents, Tolentino declined to comment on whether his law firm had sent them, but confirmed the signature on them matched his. “It has no legal bearing anyway as it’s a scanned copy,” Tolentino said. “That’s just a request [for documents].”
Following that request, EY received what appeared to be confirmations that the €1.9bn was at the banks, according to an audit report from the Big Four firm seen by the FT.
But by June, with the KPMG special audit ratcheting up the pressure, EY was demanding proof from the Philippine banks themselves that the money existed. In the week of June 15, EY received its answer: BDO and BPI said previous purported confirmations of the money’s existence were “spurious”.
Battle with the banks
The email exchanges with Marsalek in the days that followed include one from the “Tolentino” account appearing to show strenuous efforts were under way to resolve the situation.
A member of BPI’s legal team had been called and had said that the bank’s board would launch a probe into an employee who had communicated with EY, according to one email. The email also claimed that a meeting with a BDO board member had been set up.
BDO told the FT that it had no knowledge of the emails or of any “purported” meeting with a board member. It and BPI, which did not respond to requests for comment, have previously said they had no relationship with Wirecard.
Shortly after Wirecard’s downfall, Philippine authorities launched a probe into the German group’s local business partners and agents. Justice secretary Menardo Guevarra told the FT last year that Tolentino had been summoned “to shed light” on the matter. Tolentino and the banks are also embroiled in legal battles.
The elusive €1.9bn was not Wirecard’s only tie to the Philippines. It was home to a payments processor, PayEasy Solutions, that was run by a former Wirecard employee and later exposed as a sham.
Tolentino is no stranger to the business of government. He was endorsed by Duterte — with whom he shares a university alma mater and fraternity — when he ran for mayor in 2016, and lost, in a city in Mindanao, the southern island both men are from. More recently, he had a short stint as an assistant secretary at the Department of Transportation.
As authorities probe Wirecard’s downfall, Tolentino has been caught up in a storm over the Sinopharm vaccine. He told the FT that authorities had questioned him over the smuggled jabs and inspected his fishery business’s crab containers, but found nothing. It was, he said, a “waste of [his] time”.
Duterte himself apologised this month for receiving an unauthorised Sinopharm jab from a special batch donated by Beijing that had been approved for “compassionate use”.
Whether or not Covid would be a burning issue in Philippine politics next year, Tolentino wants to be involved. “Political beliefs” is the subject of one of his three Facebook pages, alongside free legal consultations and “jokes”.
The lawyer said he was set to be first on the list of nominees for a political organisation linked to Pacquiao, who is regarded a strong early contender to run for president next year.
Victory for the legendary boxer could yet see Tolentino win a seat in the country’s House of Representatives.