Former Wirecard CEO Released From Jail

Young man in handcuffs - copyright Fotolia

Former Wirecard CEO Markus Braun walks free after arrest on Monday for allegedly falsifying the accounts for the German fintech firm

Markus Braun the former CEO of Munich fintech start-up Wirecard, has been released from custody, his lawyer confirmed to Reuters on Wednesday.

Braun had been arrested on suspicion of falsifying the German payments firm’s accounts.

He had turned himself in on Monday evening, but walked free after he posted bail set by a Munich court at 5 million euros ($5.65 million).

Fintech scandal

German financial regulators this week called the situation at Wirecard a “scandal” and a “disaster”.

It is understood that the company is currently in emergency talks with its lenders, whom it owes about 1.75bn euros, over its immediate options.

Wirecard had been until recently one of Europe’s highest-profile fintech start-ups, but last Friday Markus Braun resigned after a massive discrepancy was discovered in its accounts.

Last week Wirecard said it was unable to release its annual results for 2019 because 1.9bn euros was missing from its accounts, following which Braun resigned and agency Moody’s withdrew the company’s credit rating.

On Monday Wirecard said the funds it had declared on trustee accounts at two banks in the Philippines, had probably never existed.

That declaration came after it attempted to trace the funds and reached a dead-end in the Philippines.

50 year old Braun is an Austrian citizen, and although the warrant against him has been lifted, he remains under investigation by Munich prosecutors.

He is allegedly suspected of misrepresenting Wirecard’s accounts and falsifying income.

His lawyer, Alfred Dierlamm, told Reuters that he and Braun were not commenting on the prosecutor’s accusations.

COO targeted

However, according to Reuters, on Braun’s 18-year watch, Wirecard grew into a $28 billion fintech that won a spot in 2018 in Germany’s DAX blue-chip index, only for its growth story to fall apart last Thursday after auditor EY refused to sign off on its 2019 accounts.

Braun on Thursday night posted a video message, in which he said Wirecard had been the victim of fraud.

He resigned the next day.

Sources told Reuters that German prosecutors were also considering whether to issue an international warrant for former chief operating officer Jan Marsalek, who was fired on Monday and, according to the Sueddeutsche newspaper, is currently the Philippines.

Marsalek, who is also an Austrian citizen, was responsible for Wirecard’s business in Asia that is at the centre of suspicions the group inflated its assets and revenue.

Reuters stated that his lawyer could not be reached for comment and local police said they had received no information.

The Philippines do not have an extradition treaty with Germany, Reuters reported.