/>
X

Wirecard files for insolvency due to accounting scandal, arrest of ex-CEO

The German payments provider has collapsed after $2.1 billion allegedly went missing - or simply did not ever exist.
charlie-osborne
Written by Charlie Osborne, Contributing Writer on

Wirecard has filed for insolvency in the aftermath of a $2.1 billion accounting scandal that led to the arrest of the firm's former chief executive. 

On Thursday, the German payments provider, which once offered payment services across online and mobile platforms, revealed that Wirecard's board has decided to file an application for insolvency in the district court of Munich (Amtsgericht München). 

The beleaguered company said in a statement that Wirecard AG, which accounts for roughly 6,000 employees, came to the decision "due to impending insolvency and over-indebtedness."

See also: Coronavirus and a cashless society: We can't leave the most vulnerable behind

It is yet to be decided whether or not similar insolvency applications will be filed for Wirecard Group subsidiaries. 

Wirecard's share price plunged over 75% following the announcement. 

On 18 June, the payments provider disclosed a €1.9 billion hole in its finances, with the funds allegedly deposited in banks located in the Philippines. 

Auditor EY refused to sign off on Munich-based Wirecard's annual financial statements due to the missing cash and Wirecard was warned that unless the issue was resolved, billions in loans could be called in.

According to CNBC, the two banks at the heart of the matter -- BDO and BPI -- have denied that Wirecard was ever a client, and any documents claiming otherwise have been falsified. The company has also since admitted that the money may simply not exist. 

CNET: Republicans push bill requiring tech companies to help access encrypted data

Former CEO Markus Braun said at the time that "it is currently unclear whether fraudulent transactions to the detriment of Wirecard AG have occurred," but once the announcement was made public, the executive stepped down and was later arrested. 

Having spent close to two decades at the helm, Braun is now accused of inflating Wirecard's market position and financial health to appeal to investors. The ex-CEO has been released on a €5 million bail. 

TechRepublic: Increase in productivity-and risk-since the COVID-19 lockdown

Reuters reports that creditors may be owed almost €3.5 billion ($4bn) in the wake of the company's accounting scandal and subsequent collapse. The lion's share belongs to banks that made loans to Wirecard. 

German regulators have opened up a number of investigations into Wirecard and the company's practices. 

The biggest hacks, data breaches of 2020 (so far)

Previous and related coverage


Have a tip? Get in touch securely via WhatsApp | Signal at +447713 025 499, or over at Keybase: charlie0


Related

Raspberry Pi: This 'much requested' feature just took a big step forwards
raspberry-pi-sales-jump-heres-why-the-ti-5ed5fa71a07d36782c1e10b3-1-jun-02-2020-7-10-50-poster.jpg

Raspberry Pi: This 'much requested' feature just took a big step forwards

Developer
How to recover deleted files in Windows 10 or 11
sample-image-16-9-red.jpg

How to recover deleted files in Windows 10 or 11

Windows
Feren OS is a Linux distribution that is as lovely as it is easy to use
The Feren OS desktop.

Feren OS is a Linux distribution that is as lovely as it is easy to use

Linux