FRANKFURT AM MAIN: The chief executive of scandal-hit Wirecard resigned on Friday after the German payments provider was hit with fresh fraud allegations that have left it struggling to survive.
“In mutual consent with the Supervisory Board of Wirecard AG, Dr. Markus Braun resigned today with immediate effect,” Wirecard said in a statement.
Auditors on Thursday said $2.1 billion were missing from Wirecard’s accounts, sending its share price plummeting by over 80 percent since Wednesday.
Braun will be replaced on an interim basis by James Freis, the firm added.
Wirecard’s auditor EY has refused to sign off its 2019 accounts over the missing money, which sent shares in the German financial technology firm spinning on Thursday.
“It cannot be ruled out that Wirecard AG has become the aggrieved party in a case of fraud of considerable proportions,” Wirecard Chief Executive Markus Braun said in an online video.
Braun did not identify those he suspected of fraud, while BPI and BDO, the two Philippine banks, both issued statements denying any relationship with Wirecard.
“Wirecard is not a client of the bank. The document claiming the existence of a Wirecard account with BDO is a falsified document and carries forged signatures of bank officers,” BDO said.
“The matter has already been reported to the Bangko Sentral ng Pilipinas,” BDO added in a statement, referring to the Philippines’ central bank.
Wirecard said its in-house auditor EY was unable to confirm the existence of €1.9 billion in cash balances on trust accounts, representing about a quarter of its balance sheet.
“Wirecard is not a client. Their external auditor presented to us a document that claimed that they are a client. We have determined that the document is spurious. We continue to investigate this matter,” BPI said in a statement.
EY had regularly approved Wirecard’s accounts in recent years, and its refusal to sign off for 2019 confirms failings found in an external probe by KPMG in April.
Wirecard was a welcome technology success story in Germany, which made its name in heavy industry. But its fortunes unraveled after a whistleblower alleged that it owed its success in part to a web of sham transactions.
The company dismissed the claims but its failure to win a clean bill of health this week from auditors for its accounts shattered investor confidence.
CEO of scandal-hit German payments provider Wirecard resigns
https://arab.news/jxtxe
CEO of scandal-hit German payments provider Wirecard resigns
- Auditors say $2.1 billion missing from Wirecard’s accounts
Saudi Arabia leading clean-energy revolution with $180bn for green economy, climate tech: Agility
RIYADH: Saudi Arabia is accelerating its leadership in sustainability, committing over $180 billion to a green economy while driving innovation in climate technologies, according to a new report.
According to an analysis by Agility, the Kingdom has become a dominant force in environmental solutions, accounting for 75 percent of climate technology investments in the Middle East.
The nation’s efforts include advancements in renewable energy, circular economy initiatives, and climate adaptation, solidifying its regional and global leadership.
The analysis commends the Kingdom’s policymakers for their ambitious targets under the Saudi Green Initiative and Vision 2030. NEOM, the mega-city development, is set to run entirely on renewable energy, illustrating this commitment, the report stated.
This comes as Saudi Arabia addresses significant environmental challenges, with 95 percent of its territory classified as desert and much of its habitable land at risk of degradation.
“Saudi Arabia has moved to the forefront of the clean-energy revolution and the drive to innovate and find answers to the global climate challenge. Very few countries can match its determination or its record of investment and leadership in sustainability,” Tarek Sultan, vice chairman of Agility, said.
Projections warn of more frequent droughts, prolonged heat waves, and economic strain if emissions are not curtailed. These factors underscore the importance of the Kingdom’s climate adaptation and mitigation efforts.
The report identifies further priorities, including accelerating renewable energy projects, enhancing corporate resource efficiency, expanding public transport, and improving air quality.
Key undertakings include connecting 2.8 gigawatts of renewable energy to the national grid and achieving renewable power generation goals for over 520,000 homes.
Saudi Arabia also aims to lead the global hydrogen market, targeting 4 million tonnes of green hydrogen production annually by 2035, with NEOM hosting the world’s largest hydrogen plant.
While businesses trail policymakers in adapting sustainability measures, the report reveals promising signs.
More than half of surveyed Saudi executives plan to adopt green technologies, and 54 percent of companies have allocated at least 5 percent of capital expenditure toward sustainability.
The report positions the Kingdom as a regional powerhouse and a potential global benchmark for sustainable practices.
Saudi economic growth to accelerate to 4.7% in 2025: Moody’s
RIYADH: Saudi Arabia’s economy is set to grow by 1.7 percent this year, before accelerating to 4.7 percent in 2025 and 2026, driven by government-backed projects aimed at diversifying the Kingdom’s economy, according to Moody’s.
The credit rating agency’s forecast exceeds previous estimates, including the Saudi government’s own 2024 gross domestic projection of just 0.8 percent. Moody’s outlook surpasses the Kingdom’s pre-budget statement, which had estimated a 4.6 percent growth in 2025.
The 2025 forecast aligns with Saudi Arabia’s planned expenditure for the year, set at $343 billion, underscoring the government’s commitment to economic expansion through Vision 2030. These efforts focus on diversifying the economy beyond oil, with major investments in sectors like technology, tourism, renewable energy, and infrastructure.
“In the Middle East, hydrocarbon-exporting countries are seeking to diversify their economies away from oil. Government-backed projects tied to this aim will drive strong growth in Saudi Arabia next year,” said Moody’s in its latest report.
The Kingdom’s strategy centers on large-scale “giga-projects” funded by its Public Investment Fund, including the development of the futuristic city NEOM. These initiatives are expected to play a crucial role in sustaining economic growth over the coming years.
Moody’s positive projections align with last month’s forecasts from the International Monetary Fund, which predicted 1.5 percent growth for Saudi Arabia’s economy in 2024 and 4.6 percent in 2025, while the World Bank forecasted 1.6 percent growth this year and 4.9 percent in 2025.
Stable inflation
Moody’s analysis noted that Saudi Arabia’s inflation rate is expected to remain stable at 1.6 percent in 2024 and 1.9 percent in 2025, before rising slightly to 2 percent in 2026.
Earlier this month, Saudi Arabia’s General Authority for Statistics reported that inflation reached 1.9 percent in October compared to the same month in 2023.
The Kingdom’s inflation rate remains among the lowest in the Middle East, reflecting effective measures to stabilize the economy and counter global price pressures.
In September, S&P Global forecasted Saudi Arabia’s economy to grow by 1.4 percent in 2024 and 5.3 percent in 2025, driven by the Kingdom’s diversification strategy.
Regional outlook
The report projects that the UAE, Saudi Arabia’s Arab neighbor, will see its economy grow by 3.8 percent in 2024 and 4.8 percent in 2025.
Moody’s forecasts that inflation in the UAE will remain higher than in Saudi Arabia, at 2.3 percent in 2024 and 2 percent in 2025.
The analysis also predicts Egypt’s economy will expand by 2.4 percent this year, accelerating to 4 percent in 2025. However, Egypt is expected to face a high inflation rate of 27.5 percent in 2024, dropping to 16 percent in 2025.
Emerging markets
The broader outlook for emerging markets is positive, with Moody’s noting that economic growth is stable and inflationary pressures are easing.
The credit agency expects conditions to improve in 2025, driven by steady growth, declining inflation, and monetary easing in both developed and emerging economies. However, credit risks remain a concern, with tighter credit spreads and rising bond issuance reflecting investor appetite for emerging market assets.
“In 2025, credit conditions within emerging markets are expected to further stabilize, driven by steady economic growth, slowing inflation, and monetary easing in developed and emerging markets,” said Vittoria Zoli, analyst at Moody’s Ratings.
She added that these conditions are expected to facilitate refinancing and cash flow growth, while reducing asset risk. “However, credit risks persist,” said the analyst.
Emerging markets such as India are projected to continue growing strongly, with the Indian economy forecast to expand by 7.2 percent in 2024 before moderating to 6.6 percent in 2025. In contrast, China’s growth is expected to slow to 4.2 percent in 2025, following a 4.7 percent growth in 2024.
At the regional level, economic growth is expected to remain highest in the Asia-Pacific region. The report states that India and Southeast Asian countries will continue to benefit from the global reconfiguration of supply chains, as nations and companies diversify trade and investment away from China.
Moody’s noted that the situation in Latin America is mixed, though growth will remain strong compared to the past decade. Economic growth in countries like Mexico, Argentina, and Brazil is projected to slow in 2025, while smaller economies like Chile, Colombia, and Peru will see steady expansion.
“We expect aggregate gross domestic product growth for 23 of the largest emerging market economies will slow to 3.8 percent in 2025 from 4.1 percent in 2024, with continued wide variation by region and country,” said the credit rating agency.
Moody’s attributed this slight slowdown to dampened growth in China, although it noted that domestic demand will drive growth in smaller emerging markets.
In October, the IMF projected that emerging market economies would see a GDP growth rate of 4.2 percent in both 2024 and 2025.
Moody’s report emphasized that governments in emerging markets are benefiting from stabilizing GDP growth and easing financial conditions, though debt levels remain high.
“Emerging markets governments’ average ratio of debt to GDP will decrease slightly next year as lower interest rates and stronger revenues help to narrow budget deficits. But mandatory spending – including on debt obligations – limits fiscal improvements,” said Moody’s.
It added: “One key risk to the EM outlook is the potential for US policy changes. In particular, an expansion of tariffs or renegotiation of existing trade agreements would likely disrupt global trade, hinder global economic growth, increase commodity-price volatility and subsequently weaken emerging markets currencies.”
Banking outlook
According to the report, banks in the Gulf Cooperation Council region have strong growth prospects, driven by government efforts to expand the non-energy sector.
Earlier this month, Moody’s stated in another report that Saudi Arabia’s Vision 2030 program, aimed at diversifying the Kingdom’s economy, will accelerate the growth of the banking sector in the coming years.
The analysis also highlighted that the development of major projects in the Kingdom, along with the infrastructure required to host events such as the 2027 Asia Cup, 2029 Asian Winter Games, Expo 2030, and the 2034 FIFA World Cup, are expected to create significant business and lending opportunities for banks.
Moody’s noted that the operating environment for banks in emerging economies will remain largely stable, supported by steady GDP growth and policy-rate cuts, which will boost credit growth and asset quality.
However, the credit rating agency warned that profitability may decline for banks in several countries due to imbalances in interest rate adjustments between loans and deposits.
The report also cautioned that geopolitical tensions and potential shifts in US policy could affect the credit risks of banks in emerging economies.
“Profitability will deteriorate for many banks because they typically reduce interest rates on loans faster than on deposits as they seek to attract and retain customers. This squeezes net interest margins,” said Moody’s.
It added: “Geopolitical conflicts and resulting restrictions on cross-border and investment flows are a significant credit risk for EM banks. And the potential for postelection changes to key US policies, including financial and technology regulation, could alter the operating environment.”
Saudi industrial, mining sectors offering lucrative opportunities for entrepreneurs, minister says
JEDDAH: Saudi Arabia’s industrial and mining sectors are harboring promising opportunities for youth and entrepreneurs, the Kingdom’s industry minister has insisted.
Speaking during the Misk Global Forum 2024 in Riyadh, Bandar bin Ibrahim Alkhorayef said that these opportunities go beyond direct investment to include the development of innovative ideas to improve production efficiency, manufacturing quality, and energy conservation in industrial facilities.
He explained that institutions working in industrial and mineral resources have introduced a range of enablers and initiatives to support the growth of entrepreneurial ventures and facilitate investment for young innovators in both sectors, according to the Saudi Press Agency.
The Kingdom ranked third in the Global Entrepreneurship Monitor report for 2023-2024 – a study which assesses the ecosystems of countries worldwide.
Saudi Arabia showed significant progress, with its National Entrepreneurship Context Index score increasing from 5 in 2019 to 6.3 in 2022 and 2023.
The analysis highlighted that this reflects the country’s successful efforts to diversify its economy and foster a supportive climate for business owners. The report also underlined female entrepreneurship, with eight women starting new companies for every 10 men in 2023.
Alkhorayef added that the introduced programs include financial solutions, including the 1K Miles program, designed to help entrepreneurs turn ideas into projects, and the Industrial Hackathon, which allows young innovators to present creative solutions to challenges faced by industrial facilities.
The minister further highlighted that the Kingdom has become a global hub for entrepreneurs, offering them the opportunity to pitch innovative ideas and test their success. He emphasized that the government’s unwavering support for youth creates vast opportunities for the success of their projects.
He emphasized that Saudi Arabia has recently focused on leveraging its strategic assets to develop its industrial sector and boost competitiveness. This includes utilizing its natural resources and technological advancements to compete globally in emerging industries and establish itself as a key player in international supply chains.
During the previous day’s event, the Co-Chair of the Bill and Melinda Gates Foundation, Bill Gates, highlighted the crucial role of innovation in addressing global development challenges and improving the quality of life for vulnerable populations.
Gates emphasized the importance of investing in technology and education as the foundation for a sustainable future, underlining that such investments empower future generations to positively impact their communities.
He praised Saudi Arabia’s leadership in empowering youth, highlighting initiatives like MGF 2024, which focuses on developing young people’s skills and promoting innovation and entrepreneurship. He called the forum a global model worthy of emulation.
Gates also called for strengthened international cooperation to develop joint solutions addressing current challenges.
The co-chair underscored the importance of fostering creativity, teamwork, and collective thinking to build a more sustainable future, highlighting that global collaboration could drive transformative advancements that improve the lives of millions.
The MGF 2024 announced the launch of the “Misk Grand Challenges” initiative in partnership with the Gates Foundation, aiming to inspire young people to propose innovative solutions to global education and citizenship issues, fostering creativity and engaging brilliant minds to address pressing development challenges.
During a panel discussion at the forum, Abdullah Al-Saleem, CEO and co-founder of Mushtari, offered valuable insights on when and how entrepreneurs should seek guidance for their ventures.
“Every time is the right time to seek help,” Al-Saleem said, emphasizing the importance of continuous learning and consultation in business development.
He advocated for a two-pronged approach to seeking advice, distinguishing between general business consultants and industry-specific experts.
“There are two people you have to seek help from: People that know generally about the industry, and people that know specifically about the industry,” he added.
Webuild reports no hiccup on NEOM activities after mega project CEO’s departure
LONDON: Italy’s construction group Webuild told Reuters on Tuesday its activities connected to Saudi Arabia’s NEOM are continuing in line with the plan, after the infrastructure mega project’s long-time CEO left the role last week.
“Webuild has no evidence of changes in the activity plan initially set for the projects it is implementing, nor has it recorded any delay in payments,” the company said.
NEOM, a Red Sea urban and industrial development nearly the size of Belgium due to house nearly 9 million people, is central to Saudi Arabia’s Vision 2030 plan to create new engines of economic growth beyond oil.
Webuild, which has been active in Saudi Arabia for 60 years, is building a system of three dams that will feed an artificial lake in the Trojena area and a high-speed railway called the Connector.
Riyadh’s office space to see major expansion by 2026, driven by regional HQ program: Knight Frank
- Saudi capital to see 1m sq. meters of new office space in two years
RIYADH: Saudi Arabia’s push for regional headquarters has spurred demand for office space in Riyadh, with the capital’s stock set to grow by 1 million sq. meters by 2026, a report showed.
According to global property consultancy Knight Frank’s Autumn 2024 Saudi Arabia Commercial Market Review, this will bring the city’s total office space to 6.3 million sq. meters.
The regional HQ program also impacts office lease rates, with 517 companies now committed to establishing their primary hub in the Kingdom, the report disclosed.
This comes ahead of the nation’s goal of attracting approximately 480 multinational corporations to move their headquarters to the Kingdom by 2030.
“Vision 2030 is reshaping Saudi Arabia’s economy and society, with a central focus on transforming Riyadh into a key regional and global center for business, finance, leisure, and tourism,” said Faisal Durrani, partner and head of research for the Middle East and North Africa at Knight Frank.
“Indeed, 49 percent of the new jobs created in the Kingdom over the last five years has been in Riyadh, which is adding to the upward pressure on office rents, with many key office districts and business parks fully leased, with waiting lists,” Durrani added.
He went on to say that the limited availability of office space is also forcing up Riyadh’s Grade B rents, which have climbed by 27 percent over the past year.
In the Dammam Metropolitan Area region, Grade A rents have climbed by 2.2 percent since the third quarter of 2023, fueled mainly by strong demand from the public sector, he added.
The Knight Frank report further showed that Riyadh recorded the highest national increase in Grade A office lease rates over the past 12 months, rising by 31 percent to around SR2,604 ($693) per sq. meter.
This was followed by a 2.9 percent increase in Jeddah and a 2.2 percent increase in Dammam Metropolitan Area.
The report also highlighted steady growth in Jeddah’s office market over the 12 months leading to the third quarter of 2024.
Rising office demand led to rent increases, with Grade A rents climbing 2.9 percent to SR1,235 per sq. meter, and Grade B rents rising 3.8 percent to SR810 per sq. meter compared to the same period in 2023.
Occupancy in Grade A offices in Jeddah fell slightly by 1 percentage point to 94 percent, while Grade B occupancy grew by 2 percentage points, reaching 90 percent.
In 2021, the Saudi government announced plans to limit contracts with foreign companies that do not have regional headquarters in the Kingdom.
In early 2022, the Saudi Ministry of Investment introduced new guidelines on the Invest Saudi portal to incentivize companies to set up regional headquarters in the Kingdom.
Later that year, the Saudi Ministry of Finance issued new regulations restricting government agencies from doing business with global firms that do not have regional headquarters in the Kingdom.
