Wirecard CEO quits over missing €1.9bn

Wirecard chief executive Markus Braun has resigned, as the company warned that €1.9 billion is missing from its accounts.

The German payments giant saw its shares fall by over 60 per cent yesterday when it was told by EY that there were indications a trustee to accounts held at two Asian banks had attempted “to deceive the auditor” and may have provided “spurious cash balances”.

The disclosure left Wirecard unable to release its already delayed 2019 results, with banks like Commerzbank, ING and ABN Amro having the option to terminate €2 billion worth of loans if they are not published today.

A statement explained that Wirecard was “working intensively together with the auditor towards a clarification of the situation”.

In a statement this morning, Braun said: "At present it cannot be ruled out that Wirecard has become the aggrieved party in a case of fraud of considerable proportions."

He will be replaced by James Freis as interim chief executive, who was due to join the firm in July to take charge of a newly created Integrity, Legal and Compliance department.

The company's chief operating officer Jan Marsalek was also suspended yesterday “on a revocable basis” until 30 June.

The Financial Times reported in October that Wirecard staff appeared to have conspired to fraudulently inflate sales and profits at subsidiaries in Dubai and Dublin, misleading group auditor EY for a decade. Then in December, it reported that escrow accounts, controlled on behalf of Wirecard and certain partners by trustees, had been used to boost the group’s cash balances.

Earlier this week, Braun said that “previously issued confirmations by the banks were no longer recognised by the auditor”. He added that “it is currently unclear whether fraudulent transactions to the detriment of Wirecard have occurred”.

The six-month audit by KPMG, ending in April, was unable to resolve questions about the group’s accounting, with forensic examiners unable to trace transactions underpinning “the lion’s share” of Wirecard profits reported between 2016 and 2018.

German financial regulator BaFin stated that it would “take the current developments into account” in its investigation into potential market manipulation by Wirecard.

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