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After EUR 1.9 bln implosion, Wirecard's former CEO is arrested for financial fraud

Wednesday 24 June 2020 08:31 CET | News

Markus Braun, the former chief executive of the Munich-based fintech company Wirecard, has been arrested by the German police for fraud.

The former CEO turned himself to German authorities on the same day Wirecard admitted that EUR 1.9 billion the company had reported on its balance sheet did not exist, according to TechCrunch.

Publicly traded since 2005, Wirecard was one of the largest fintech companies in Germany. In April 2019, the company managed to attract a USD 1 billion investment from SoftBank to finance Wirecard’s expansion into Asian markets. Thus, the company’s operations include an Asian business unit based in Singapore, which is what SoftBank’s capital was intended to expand, and US operations through the acquisition of Citigroup’s prepaid card services.

That expansion increased the value of Wirecard’s share price, but unfortunately the paper profits Wirecard reported were different from the actual amounts of money. The company’s supervisory board deals with addressing the fact ‘that the bank trust account balances in the amount of EUR 1.9 billion do not exist within the company’s coffers’ TechCrunch added.

Wirecard’s troubles have been in the spotlight since the Financial Times began its reporting, and June 18, 2020 marks the fourth time that the payments processing company said it would not be able to publish its financials for the 2019 fiscal year after auditors at Ernst & Young revealed accounting irregularities and an independent audit investigation by KPMG also came back inconclusive, the online publication added.

Wirecard has already fired its chief operating officer, Jan Marsalek, and Braun, who worked at Wirecard since 2002 and served as the company’s chief technology officer and chief executive.
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Keywords: Wirecard, financial fraud, auditors, KPMG, E&Y, Germany, Jan Marsalek, Financial Times, Markus Braun, SoftBank
Categories: Banking & Fintech | Payments General
Countries: Germany
This article is part of category

Banking & Fintech