Risk & Compliance

Wirecard CEO Resigns Amid Cash Mystery

Markus Braun's departure came a day after the German fintech firm disclosed it was missing $2 billion in cash.
Matthew HellerJune 22, 2020
Wirecard CEO Resigns Amid Cash Mystery

Wirecard CEO Markus Braun has resigned a day after the scandal-wracked German payments firm disclosed it was missing $2 billion in cash.

Braun’s abrupt departure capped a tumultuous 48 hours during which Wirecard’s shares crashed by more than 80%, wiping nearly 10 billion euros ($11.2 billion) off its market value.

“The confidence of the capital market in the company I have been managing for 18 years has been deeply shaken,” Braun wrote Friday in his resignation letter. “With my decision, I respect the fact that responsibility for all business transactions lies with the CEO.”

The once high-flying Wirecard on Thursday had delayed publication of its 2019 results, saying its auditors at EY could not find “sufficient audit evidence” of about 1.9 billion euros, or $2 billion, in its cash balances that Wirecard said had been deposited in two Asian bank accounts — Bank of the Philippine Islands and BDO Unibank.

Both banks denied having any business relationship with Wirecard. “The document claiming the existence of a Wirecard account with BDO is a falsified document and carries forged signatures of bank officers,” BDO said.

“Without a very concise explanation in short order, we fear Wirecard is headed to zero,” said Jasper Lawler, head of research at London Capital Group.

In the latest twist, Wirecard said Monday it was likely that “the bank trust account balances in the amount of 1.9 billion euros do not exist.”

Wirecard processes payments for consumers and businesses and sells data analytics services, reporting revenue of over $2.2 billion in 2018 and replacing Commerzbank in Germany’s list of top 30 companies when it was valued at nearly $27 billion.

The company “had been a welcome technology success story in Germany, a country better known for its prowess in heavy industry,” the New York Post said.

But in 2019, The Financial Times questioned its accounting practices, citing documents that appeared to indicate profits and sales had been inflated at Wirecard outposts in Dubai and Ireland. Germany’s financial regulator is currently conducting three simultaneous investigations into Wirecard.

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