Germany charges Wirecard's ex-CEO Braun over fraud
Markus Braun
German prosecutors said Monday they have chargedWirecard's former chief executive MarkusBraunand two other high-ranking managers for the colossal commercialfraudthat led to the collapse of the payment company.
The trio are accused of market manipulation, embezzlement and gangfraudon a commercial scale, said prosecutors, noting that the indictment itself runs to 474 pages.
The German fintech company, once touted as a shining star of innovative start-ups, crashed in June 2020 after admitting that a missing 1.9 billion euros ($2.1 billion) from its balance sheets likely didn't exist.
The time it took for prosecutors to file formalchargesunderlined the intricate and complex web of fraudulent transactions that investigators travelled across the world to unravel.
Among victims of thefraudwere banks that had provided credit of 1.7 billion euros toWirecard. Bonds worth 1.4 billion euros had also been issued, which are unlikely to be repaid.
"All the accused group members were acting in an industrial fashion in these six cases offraud, because that is how they secured their own salaries, including partially profit-related portions," prosecutors said in a statement.
Braunfor instance, received at least 5.5 million euros in dividends, they said.
Wirecard's troubles began in January 2019 with a series of articles in the Financial Times alleging accounting irregularities in its Asian division, headed by chief operating officer Jan Marsalek.
But the financial technology company was able, at that time, to repeatedly fend off claims and the FT's journalists themselves came under investigationoverthe reports.
The huge scam unravelled in June 2020 when auditors Ernst & Young said they were unable to find 1.9 billion euros of cash in the company's accounts.
The sum, which made up a quarter of the balance sheet, was supposedly held to cover risks in trading carried out by third parties onWirecard's behalf and was meant to be sitting in trustee accounts at two Filippino banks.
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But the Philippines' central bank has said the cash never entered its monetary system and both Asian banks, BDO and BPI, denied having a relationship withWirecard.
While key figures in the company have since been detained, includingBraun, the company's former COO Marsalek, who is wanted by German prosecutors, remains at large.