Shares of French payments leader Worldline SA (WLN.PA) dropped over 41% on Wednesday after media reports alleged the firm was handling payments for high-risk businesses, including online gambling and adult entertainment.
The crash erased over €500 million (US$535 million) from the company's market capitalization. Worldline’s shares have dropped over 96% from their peak in mid-2021.
‘Corrupt Transactions’
A joint inquiry by 21 European media organizations, named “Dirty Payments,” claimed Worldline relocated high-risk clients among subsidiaries to evade regulatory scrutiny. These clients had earlier been identified as presenting possible compliance risks by financial regulators.
In 2023, Germany's financial regulator, BaFin, notably issued a directive that prohibited Worldline’s German affiliate, Payone, from engaging in business with approximately 450 similar merchants.
Internal documents reviewed by reporters indicate that numerous clients were merely transferred to different Worldline divisions, like its Swedish branch.
No public proof exists that Worldline was involved in fraud or violated the law. The report claims the company might have intentionally deceived regulators to safeguard specific sources of income.
Worldline reaffirmed its dedication to compliance in a statement on Wednesday, asserting that it resolved the matter last year. The company reported that it completed a comprehensive assessment of its high-risk merchant portfolio in 2023 and eliminated high-risk clients responsible for approximately €130 million in annual revenue.
“Worldline has implemented a reinforced risk framework across all business units,” the company said, adding that it cooperates with regulators in Germany, France, and the Netherlands.
Zero Acceptance
During a webcast on Thursday, CEO Pierre-Antoine Vacheron informed investors that the firm maintained a “zero tolerance for noncompliance” and was dedicated to transparency. According to Reuters, shares jumped approximately 12% in early trading after those remarks.
Even with the partial recovery, analysts cautioned that reputational harm might persist.
“While the company insists that these issues were addressed and [are] already included in guidance, we fear this could impact the stabilization of the company and its free cash flow generation,” JP Morgan wrote in a note.