Wirecard’s Former CEO Markus Braun Arrested

Ex-Wirecard CEO Markus Braun was arrested Monday night (June 22) in the latest chapter that has rocked the German payment services provider, the Financial Times reported.

Braun surrendered to Munich prosecutors after a judge issued a warrant as prosecutors investigate an accounting scandal that centers on a missing 1.9 billion euros ($2.1 billion), prosecutors confirmed on Tuesday.

The 50-year-old executive faces charges of accounting fraud and market manipulation designed to artificially inflate the financial technology company’s balance sheet to make it look more appealing to investors and customers, the Financial Times reported.

Braun allegedly committed the scam with others, investigators said, but no one else had been named at press time, according to the report.

A lawyer for Braun did not immediately respond to a request for comment from the newspaper.

Until his resignation Friday (June 19), when an audit revealed 1.9 billion euros ($2.1 billion) were missing from two bank accounts in the Philippines, Braun had been at the top of the FinTech company since 2002, the Times reported.

Since the drama unfolded, Wirecard share values have plummeted. On June 17, the stock closed at $104.50. But by the open on Tuesday (June 23), the stock had dropped to $14.25.

The company said that it was trying to determine “whether, in which manner and to what extent such business has actually been conducted for the benefit of the company,” the report said.

Founded in 1999, Wirecard was once considered one of the most promising tech firms in Europe. It processes payments and sells data analytics services. The company has nearly 6,000 employees in 26 countries worldwide.

Wirecard calls itself the world’s first payment service provider to offer more than 200 local and global payment solutions, according to the company’s website.

Bloomberg reported Monday that the Bank of China is one of more than a dozen commercial banks that have lent $2 billion through a facility to Wirecard. The bank is considering whether to write off roughly $90 million lent to Wirecard, and would not extend the line.

Ernst & Young, the company’s auditor, said it became suspicious of whether the money was ever deposited into the accounts.

“There is a prevailing likelihood that the bank trust account balances in the amount of 1.9 billion euros do not exist,” Wirecard said at the time.

On Sunday (June 21) Wirecard’s claim to have directed the cash to BDO Unibank Inc. and the Bank of the Philippine Islands was challenged by the Philippines central bank. The Bangko Sentral ng Pilipinas said the money never entered the country.