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Wirecard chief Braun arrested

Former Wirecard chief executive Markus Braun has been arrested after turning himself in to the police on Monday evening.

Braun is being detained in Munich on suspicion of inflating the firm's balance sheet and sales through fake transactions designed to make the company appear stronger to potential investors.

The latest twist in the Wirecard saga comes after Monday's revelation that EUR1.9 billion supposedly held in escrow accounts at two Asian banks most likely does not exist.

Braun quit his post at the firm on Firday and was swiftly followed out the exit door by COO Jan Marsalek whose contract was terminated on Monday.

Wirecard's shares have tanked as mounting accounting irregularities have come to light at the former hot tech German startup, which has called in investment bank Houlihan Lokey to formulate a rescue package.

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Editorial | what does this mean?

This content has been selected, created and edited by the Finextra editorial team based upon its relevance and interest to our community.

Comments: (3)

Marite Ferrero - Lumiere LTD - London 23 June, 2020, 10:43

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This was expected. A question comes to mind: Why did it take E&Y so many years to discover the made up holdings? Something like this means that we have not seen the bottom at 16 euros for WIRECARD. I saw this coming since 2010 (separate story). I didn't shortsell WIRECARD because no one knows if and when an accounting firm will play ball with their client. The stock could have gone the other way with a clean bill of health from an accounting firm.

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Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 24 June, 2020, 12:51

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I asked an auditor how his ilk verifies "Cash at Bank" figures. He told me, we look at the bank statement submitted by the audited company. I asked him, what if it's Photoshopped. He didn't know what Photoshopped meant.

Internet Banking has been around for nearly 20 years. How hard is it for auditors to log in to a company's bank account and see for themselves what is the bank balance?

15 years ago, when I was in Germany, I used t hear the phrase “Gute Frage, Naechste Frage” regularly. Translating to “Good Question, Next Question”, this is the stock answer I got in Germany whenever I asked a tricky question or a question to which there is no answer.

I guess 15 years later, we might get the same answer even today to the above question.