London Daily

Focus on the big picture.
Friday, Aug 22, 2025

Wirecard joined the popular German-Mega-Fraud-Companies-Club (Deutsche Bank, Siemens, Volkswagen, FlowTex, Thyssenkrupp Marine and so many others)

Wirecard joined the popular German-Mega-Fraud-Companies-Club (Deutsche Bank, Siemens, Volkswagen, FlowTex, Thyssenkrupp Marine and so many others)

After so many Mega German companies found guilty of fraud, bribery and corruption - the natural question is rising: what more of the real dirt is hiding behind the questionable German "clean", "disciplined", "professional" and "quality" facade?

Markus Braun, the tech entrepreneur who built Wirecard into one of Germany's biggest companies, has been arrested after a $2.1 billion hole exploded in its accounts.

Munich prosecutors confirmed that Braun, Wirecard's former CEO, was arrested on suspicion of having inflated the digital payment company's balance sheet and sales through fake transactions in order to make it more attractive to investors and customers. Prosecutors said that Braun may have acted in cooperation with other perpetrators.

Braun will be released from custody Tuesday on bail of €5 million ($5.7 million), prosecutors said.

Wirecard (WCAGY) acknowledged on Monday that €1.9 billion ($2.1 billion) in cash included in financial statements - or roughly a quarter of its assets - probably never existed in the first place. The company withdrew its preliminary results for 2019, the first quarter of 2020 and its profit forecast for 2020.

The scandal erupted last week when Wirecard said that its auditor, EY, could not locate the funds in trust accounts and refused to sign off on the company's financial results. The fallout is raising questions over how the company's regulators and auditors could have missed accounting irregularities that are already drawing comparisons to Enron, the American energy giant that filed for bankruptcy in 2001.

Braun resigned as CEO on Friday, suggesting that Wirecard itself may have been the victim of a massive fraud. Jan Marsalek, a board member and chief operating officer at the company, was fired on Monday.

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

Braun, who also served as Wirecard's chief technology officer, had led the company since 2002. The former KPMG consultant is the company's largest shareholder, with holdings of just over 7%, according to data from Refinitiv.

Wirecard grew quickly with Braun at the helm. The company reported revenues of over €2 billion ($2.2 billion) in 2018, or more than four times the figure from 2013. Shares hit an all-time high above €190 ($213) in September 2018, the same month Wirecard replaced Commerzbank (CRZBF) in Germany's list of top 30 companies. At that point, it was worth more than €24 billion ($26.9 billion).

The company now faces an existential crisis. A frantic search for the missing money ran into a dead end over the weekend in the Philippines, where the central bank denied the cash had entered the country's financial system. The company's shares plummeted on Monday, extending a crash that wiped 85% off its share price over three trading sessions. Wirecard ended the day with a market value of €1.7 billion ($1.9 billion).

Wirecard is scrambling to keep creditors at bay, a task that could be complicated by the arrest of its former CEO. The company said late Friday that it had hired investment bank Houlihan Lokey to come up with a new financing strategy.

'Total disaster'


German finance minister Olaf Scholz described the scandal as "extremely worrying" on Tuesday, saying the country must act quickly to improve oversight of companies such as Wirecard. "Critical questions arise over the supervision of the company, especially with regards to accounting and balance sheet control. Auditors and supervisory bodies do not seem to have been effective here," Scholz said in a statement.

The Federal Financial Supervisory Authority, or BaFin, said last week that it is actively investigating whether Wirecard violated rules against market manipulation. But Felix Hufeld, who leads the regulator and sits on the European Central Bank's supervisory board, described the scandal as a "total disaster."

"It is a scandal that something like this could happen," Hufeld said, in comments that were reported by Reuters and confirmed by the regulator.

The implosion follows a tumultuous 18 months for the company punctuated by allegations of fraud, attacks by short sellers and questions over its accounting practices.

The success story began to unravel in January 2019, when the Financial Times reported that Wirecard forged and backdated contracts in a string of suspicious transactions in Singapore. The company denied the report, which was produced with the help of a whistleblower, but its shares plummeted. In February 2019, authorities in Singapore said they would investigate.

Another blow landed late last year, when the FT published a report and company documents suggesting that profits and sales had been inflated at Wirecard outposts in Dubai and Ireland. Wirecard again denied the allegations. But an investigation by KPMG published in April found the company had not provided enough information to fully explain issues raised by the FT.

Braun explained his decision to quit last week in a letter to employees and shareholders.

"The confidence of the capital market in the company I have been managing for 18 years has been deeply shaken ... I respect the fact that responsibility for all business transactions lies with the CEO," said Braun.

Newsletter

Related Articles

0:00
0:00
Close
Bunkers, Billions and Apocalypse: The Secret Compounds of Zuckerberg and the Tech Giants
Ukraine Declares De Facto War on Hungary and Slovakia with Terror Drone Strikes on Their Gas Lifeline
Animated K-pop Musical ‘KPop Demon Hunters’ Becomes Netflix’s Most-Watched Original Animated Film
New York Appeals Court Voids Nearly $500 Million Civil Fraud Penalty Against Trump While Upholding Fraud Liability
Elon Musk tweeted, “Europe is dying”
Far-Right Activist Convicted of Incitement Changes Gender and Demands: "Send Me to a Women’s Prison" | The Storm in Germany
Hungary Criticizes Ukraine: "Violating Our Sovereignty"
Will this be the first country to return to negative interest rates?
Child-free hotels spark controversy
North Korea is where this 95-year-old wants to die. South Korea won’t let him go. Is this our ally or a human rights enemy?
Hong Kong Launches Regulatory Regime and Trials for HKD-Backed Stablecoins
China rehearses September 3 Victory Day parade as imagery points to ‘loyal wingman’ FH-97 family presence
Trump Called Viktor Orbán: "Why Are You Using the Veto"
Horror in the Skies: Plane Engine Exploded, Passengers Sent Farewell Messages
MSNBC Rebrands as MS NOW Amid Comcast’s Cable Spin-Off
AI in Policing: Draft One Helps Speed Up Reports but Raises Legal and Ethical Concerns
Shame in Norway: Crown Princess’s Son Accused of Four Rapes
Apple Begins Simultaneous iPhone 17 Production in India and China
A Robot to Give Birth: The Chinese Announcement That Shakes the World
Finnish MP Dies by Suicide in Parliament Building
Outrage in the Tennis World After Jannik Sinner’s Withdrawal Storm
William and Kate Are Moving House – and the New Neighbors Were Evicted
Class Action Lawsuit Against Volkswagen: Steering Wheel Switches Cause Accidents
Taylor Swift on the Way to the Super Bowl? All the Clues Stirring Up Fans
Dogfights in the Skies: Airbus on Track to Overtake Boeing and Claim Aviation Supremacy
Tim Cook Promises an AI Revolution at Apple: "One of the Most Significant Technologies of Our Generation"
Apple Expands Social Media Presence in China With RedNote Account Ahead of iPhone 17 Launch
Are AI Data Centres the Infrastructure of the Future or the Next Crisis?
Cambridge Dictionary Adds 'Skibidi,' 'Delulu,' and 'Tradwife' Amid Surge of Online Slang
Bill Barr Testifies No Evidence Implicated Trump in Epstein Case; DOJ Set to Release Records
Zelenskyy Returns to White House Flanked by European Allies as Trump Pressures Land-Swap Deal with Putin
The CEO Who Replaced 80% of Employees for the AI Revolution: "I Would Do It Again"
Emails Worth Billions: How Airlines Generate Huge Profits
Character.ai Bets on Future of AI Companionship
China Ramps Up Tax Crackdown on Overseas Investments
Japanese Office Furniture Maker Expands into Bomb Shelter Market
Intel Shares Surge on Possible U.S. Government Investment
Hurricane Erin Threatens U.S. East Coast with Dangerous Surf
EU Blocks Trade Statement Over Digital Rule Dispute
EU Sends Record Aid as Spain Battles Wildfires
JPMorgan Plans New Canary Wharf Tower
Zelenskyy and his allies say they will press Trump on security guarantees
Beijing is moving into gold and other assets, diversifying away from the dollar
Escalating Clashes in Serbia as Anti-Government Protests Spread Nationwide
The Drought in Britain and the Strange Request from the Government to Delete Old Emails
Category 5 Hurricane in the Caribbean: 'Catastrophic Storm' with Winds of 255 km/h
"No, Thanks": The Mathematical Genius Who Turned Down 1.5 Billion Dollars from Zuckerberg
The surprising hero, the ugly incident, and the criticism despite victory: "Liverpool’s defense exposed in full"
Digital Humans Move Beyond Sci-Fi: From Virtual DJs to AI Customer Agents
YouTube will start using AI to guess your age. If it’s wrong, you’ll have to prove it
×