Saudi Press

Saudi Arabia and the world
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

Saudi Press
0:00
0:00
Close
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"
Are AI Data Centres the Infrastructure of the Future or the Next Crisis?
Miles Worth Billions: How Airlines Generate Huge Profits
Zelenskyy Returns to White House Flanked by European Allies as Trump Pressures Land-Swap Deal with Putin
Beijing is moving into gold and other assets, diversifying away from the dollar
Cristiano Ronaldo Makes Surprise Stop at New Hong Kong Museum
Zelenskyy to Visit Washington after Trump–Putin Summit Yields No Agreement
High-Stakes Trump-Putin Summit on Ukraine Underway in Alaska
Iranian Protection Offers Chinese Vehicle Shipments a Cost Advantage over Japanese and Korean Makers
Saudi Arabia accelerates renewables to curb domestic oil use
Cristiano Ronaldo and Georgina Rodríguez announce engagement
Asia-Pacific dominates world’s busiest flight routes, with South Korea’s Jeju–Seoul corridor leading global rankings
Private Welsh island with 19th-century fort listed for sale at over £3 million
Sam Altman challenges Elon Musk with plans for Neuralink rival
Australia to Recognize the State of Palestine at UN Assembly
The Collapse of the Programmer Dream: AI Experts Now the Real High-Earners
Armenia and Azerbaijan to Sign US-Brokered Framework Agreement for Nakhchivan Corridor
British Labour Government Utilizes Counter-Terrorism Tools for Social Media Monitoring Against Legitimate Critics
WhatsApp Deletes 6.8 Million Scam Accounts Amid Rising Global Fraud
Nine people have been hospitalized and dozens of salmonella cases have been reported after an outbreak of infections linked to certain brands of pistachios and pistachio-containing products, according to the Public Health Agency of Canada
Texas Residents Face Water Restrictions While AI Data Centers Consume Millions of Gallons
Tariffs, AI, and the Shifting U.S. Macro Landscape: Navigating a New Economic Regime
India Rejects U.S. Tariff Threat, Defends Russian Oil Purchases
United States Establishes Strategic Bitcoin Reserve and Digital Asset Stockpile
Thousands of Private ChatGPT Conversations Accidentally Indexed by Google
China Tightens Mineral Controls, Curtailing Critical Inputs for Western Defence Contractors
OpenAI’s Bold Bet: Teaching AI to Think, Not Just Chat
BP’s Largest Oil and Gas Find in 25 Years Uncovered Offshore Brazil
JPMorgan and Coinbase Unveil Partnership to Let Chase Cardholders Buy Crypto Directly
British Tourist Dies Following Hair Transplant in Turkey, Police Investigate
WhatsApp Users Targeted in New Scam Involving Account Takeovers
Trump Deploys Nuclear Submarines After Threats from Former Russian President Medvedev
Germany’s Economic Breakdown and the Return of Militarization: From Industrial Collapse to a New Offensive Strategy
IMF Upgrades Global Growth Forecast as Weaker Dollar Supports Outlook
Politics is a good business: Barack Obama’s Reported Net Worth Growth, 1990–2025
"Crazy Thing": OpenAI's Sam Altman Warns Of AI Voice Fraud Crisis In Banking
Japanese Prime Minister Vows to Stay After Coalition Loses Upper House Majority
President Trump Diagnosed with Chronic Venous Insufficiency After Leg Swelling
Man Dies After Being Pulled Into MRI Machine Due to Metal Chain in New York Clinic
FIFA Pressured to Rethink World Cup Calendar Due to Climate Change
"Can You Hit Moscow?" Trump Asked Zelensky To Make Putin "Feel The Pain"
Nvidia Becomes World’s First Four‑Trillion‑Dollar Company Amid AI Boom
Iranian President Reportedly Injured During Israeli Strike on Secret Facility
Kurdistan Workers Party Takes Symbolic Step Towards Peace in Northern Iraq
BRICS Expands Membership with Indonesia and Ten New Partner Countries
Elon Musk Founds a Party Following a Poll on X: "You Wanted It – You Got It!"
AI Raises Alarms Over Long-Term Job Security
Saudi Arabia Maintains Ties with Iran Despite Israel Conflict
Russia Formally Recognizes Taliban Government in Afghanistan
×