Worldline Woes Draw Credit Agricole Staff Queries Over 2024 Stake
(Bloomberg) -- The fraud allegations enveloping French payments firm Worldline SA have prompted questions from employees at Credit Agricole SA, who want to know why executives agreed to closer ties with the payment firm last year, according to people familiar with the matter.
Some employee representatives have written an email to Credit Agricole's management questioning the firm's decision to take a 7% stake in Worldline early last year, one of the people said, asking not to be identified discussing the private information. The representatives want to know if the bank carried out appropriate checks at the time.
A representative for Credit Agricole declined to comment.
Credit Agricole and Worldline formed a joint venture in 2023 to replace the French lender's previous payments partnership with Wirecard AG, which collapsed in 2020 and became the country's biggest-ever accounting scandal.
Worldline's shares closed down 38% Wednesday on media reports that the company allegedly covered up fraud by some of its customers. A series of articles overseen by European journalism network EIC claimed the firm previously ignored warnings and continued to do business with prohibited and other high-risk customers, effectively allowing some fraudulent transactions to continue.
The stake in Worldline taken by Credit Agricole in early 2024 was partly meant to help stabilize the payments partner after it announced in October 2023 it was cutting ties with some German clients following the decision by the country's financial watchdog Bafin to impose severe restrictions on local subsidiary Payone for failing to prevent credit card fraud by some third parties.
Speaking on a conference call with analysts late Wednesday, Worldline Chief Executive Officer Pierre-Antoine Vacheron said the company had been 'attacked' by the media, saying 'there's nothing new' in the media reports.
The developments raise the risk that Worldline's JV partners may be 're-evaluating their partnerships,' Jefferies analysts said in a note.
Credit Agricole signed a deal with Wirecard in 2018, though it paused the development of joint projects the subsequent year amid concerns about the firm.
Worldline said in its annual report published earlier this year that the Credit Agricole partnership, which is named CAWL, was expected to become 'fully operational during the first half 2025.' The payments firm owns 50% plus 1 share in the JV, it said.
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