Former Wirecard CEO under arrest as regulators probe company's accounts
Markus Braun, who resigned last week, was arrested on Monday evening in Munich
Wirecard’s former chief executive was arrested by Munich prosecutors after 1.9 billion euros ($2.1 billion) went missing from the digital payments company, in a scandal that has rattled Germany’s financial industry.
Markus Braun, who resigned last week, was arrested on Monday evening in Munich as part of a probe into the company’s accounting practices, prosecutors said in an e-mailed statement. A judge will decide on Tuesday how long he will be held.
The company is fighting for survival after acknowledging that the funds probably don’t exist, deepening its accounting woes. The payment processor said it’s in discussions with creditors and is considering a full-scale restructuring after pulling its financial results for fiscal 2019 and the first quarter of 2020.
Previous descriptions of its business with third parties, which process transactions on Wirecard’s behalf, were “not correct”, according to the company.
In less than a week, the FinTech company once hyped as the future of German finance has lost most of its market value.
“It’s a complete disaster we’re looking at,” said Felix Hufeld, head of BaFin, Germany’s top financial regulator, at a panel discussion Monday. “It’s a shame that something like that happened.”
Updated: June 23, 2020 01:02 PM