Network International Share News (NETW)

(Sharecast News) - Payments company Network International Holdings said it would publish in January a response to criticisms by short seller ShadowFall over its $288m (£213m) acquisition of African business DPO Group and links to collapsed German fintech Wirecard.


"We take any critique of the company seriously. While we believe many of the issues raised have already been addressed, the historical nature of certain statements in the report means that a full response will take some time. Network expects to publish a response by the end of January 2021," the company said on Thursday.

The acquisition was unveiled in July but is yet to complete. ShadowFall has highlighted concerns around a subsidiary of DPO called AconaOnline.

A report circulated among ShadowFall's clients this month, said that while DPO was an Africa-focused business, it was "birthed by the 'back-room boys' to Wirecard UK & Ireland", the Sunday Times reported.

Acona, now dormant and in the process of being liquidated, was sold to DPO by Dietmar Knöchelmann, a German businessman whose companies were bought by Wirecard as part of a €43m deal in 2007. He continued to work for Wirecard as a director of its Irish-registered Wirecard Payment Solutions Holdings until 2009.

Network International on Monday said Acona was used historically to process "negligible volumes in relation to European cardholders purchasing travel services from DPO's merchant customers".

"A process to liquidate Acona was commenced at the end of 2018, prior to our engagement with DPO," the company said.

In 2016, Knöchelmann pleaded guilty in Israel to helping a local credit card firm called ICC-Cal, and its then executives, commit fraud from 2008 to 2010.

Network International said it had hired lawyers at Freshfields to help it look into DPO and its subsidiaries.

"In advance of completion, Network is continuing to take additional steps to provide further assurance including in relation to the related entities and has appointed Freshfields Bruckhaus Deringer LLP to assist it," it said earlier this week.

"We have not found any evidence to date of any wrongdoing by DPO or its management and can confirm that no Wirecard directors or executives, past or present at any time, have ever been involved in the management of DPO."