Wirecard: Former boss arrested over €1.9bn scandal

Wirecard
Wirecard have admitted the €1.9bn simply may not exist.

The ex-boss of scandal-hit payments firm Wirecard has been arrested in Germany.

Markus Braun resigned last Friday after auditor EY refused to sign off the firm’s 2019 accounts over a missing €1.9bn (£1.7bn).

The money accounts for about a quarter of the firm’s total balance sheet.

Prosecutors accuse Mr Braun of inflating Wirecard’s finances to make it appear healthier to investors and customers.

Mr Braun reported himself to Munich prosecutors on Monday evening after a judge issued an arrest warrant against the 50-year old.

The missing €1.9bn was supposedly held in accounts at two Asian banks and had been set aside for “risk management”, Wirecard had said.

But EY said after an audit of the business that banks had been unable to provide the account numbers for where the money was held.

On Monday, Wirecard admitted the €1.9bn simply may not exist.

The German company also said it was withdrawing its financial results for 2019 and the first quarter of 2020.

“The management board of Wirecard assesses on the basis of further examination that there is a prevailing likelihood that the bank trust account balances in the amount of 1.9 billion EUR do not exist,” the company said in a statement.

Mr Braun had been in charge of the German fin-tech firm since 2002.

When Wirecard joined Germany’s blue-chip Dax 30 share index two years ago it was valued at €24bn. But the company’s shares have crashed more than 80% in recent days giving it a stock market valuation of less than €3bn.

The scandal at the firm emerged after a series of articles in the Financial Times last year focusing on alleged accounting irregularities in Wirecard’s Asian operations.

Source: bbc.co.uk

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