Former Wirecard CEO arrested on suspicion of falsifying revenue: prosecutors

Former Wirecard Chief Executive Markus Braun has been arrested on suspicion of falsifying company revenue to make it appear stronger and more attractive for investors and customers, prosecutors said in a statement on Tuesday.

Wirecard had said on Monday that 1.9 billion euros ($2.15 billion) it had booked in its accounts likely never existed, a black hole that threatens to engulf the payments company.

Braun turned himself in on Monday evening and will attend a hearing on Tuesday where a judge will decide whether he is to remain in custody, the Munich prosecutors said. Braun’s lawyer was not immediately available for comment.

Braun is accused of misrepresenting the company’s accounts and of market manipulation by falsifying income from transactions with so-called third-party acquirers, the prosecutors added.

Wirecard said last week that auditor EY had refused to sign off on its 2019 accounts as it was unable to confirm the existence of 1.9 billion euros in cash balances in trust accounts, about a quarter of its balance sheet.

The one-time investor darling is now holding emergency talks with its banks, which are owed roughly 1.75 billion euros, to avert a looming cash crunch triggered by the missing money.

The episode marks a dramatic turn in the fortunes of a home-grown tech firm that attracted some of the world’s biggest investors before a whistleblower alleged that it owed its success in part to a web of sham transactions.

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