German digital payments company Wirecard registered a loss of 13 percent in Germany's DAX stock exchange on Wednesday, amid reports that a senior company executive had engaged in fraudulent activities.

The Bavarian startup has been valued at €20 billion ($23 billion)  and had been the darling of investors. Last year, the company surpassed Deutsche Bank in market capitalization and surpassed Commerzbank in the Dax 30 index.

Wirecard owns a bank and is a member of the Visa and Mastercard payment networks, distributing hundreds of millions of euros in credit and debit card transactions every day.

But a damaging report by the Financial Times (FT) now threatens to ruin the reputation of the fintech firm.

Read more: What’s behind the remarkable rise of German fintech Wirecard?

Citing information obtained through a whistleblower, FT said top executive Edo Kurniawan, accounting specialist for the Asia-Pacific region, used forged and backdated contracts to produce a string of suspicious transactions.

Report denied

In a statement, Wirecard said the report was "false, inaccurate, misleading and defamatory," and that the FT article lacked any substance and was "completely meaningless."

Kurniawan, meanwhile, has remained at his post, working at Wirecard's regional head office in Singapore, FT said.

The whistleblower told the newspaper that a lack of action by the company over the potentially criminal acts was the main motivation to leak the information.

Wirecard is Germany's third-largest financial group in the country's stock market. It is connected to more than 200 international payment networks, ranging from banks, payment platforms and card networks.

The company's rise has been fueled by a boom in e-commerce and a rise in demand for mobile payments and online transactions.

jcg/aw (Reuters, dpa)

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