Ex-Wirecard CEO, 2 Other Execs Arrested on Charges That They Hid Huge Losses

wirecard
  • Markus Braun, former chief executive of Wirecard and two other former executives of the company were charged, with prosecutors alleging the firm knew of massive losses as early as 2015.
  • Wirecard Group officials allegedly agreed to inflate books with fake assets to make Wirecard more appealing to creditors, consumers, and lenders.
  • The group conspired to get around €3.2 billion in fraudulent loans, prosecutors said Wednesday in Munich.
  • Visit The Financial Today’s homepage for more stories.

Munich • Markus Braun, former chief executive of Wirecard ($WDI) and two other former executives of the company were charged, with prosecutors alleging the firm knew of massive losses as early as 2015.

The group conspired to get around €3.2 billion in fraudulent loans, prosecutors said Wednesday in Munich.

Wirecard Group officials allegedly agreed to inflate books with fake assets to make Wirecard more appealing to creditors, consumers, and lenders.

“The suspects knew at least by the end of 2015 that the Wirecard Group was losing money,” prosecutors said. “Deceived by faked accounts, banks in Germany and Japan, as well as other investors, granted funds of about €3.2 billion, which are now most likely lost,” prosecutors added.

In June, Wirecard filed for bankruptcy after admitting that it had reported €1.9 billion as assets that probably did not exist, which deepened its accounting woes.

The company acknowledged that previous business statements with third parties, which handled transactions on behalf of Wirecard, were “not correct” after pulling its financial reports for last year and the first quarter of this year.

Wirecard declined to comment before the prosecutors’ announcement. Braun’s lawyer, Alfred Dierlamm, did not reply to calls and an e-mail seeking comment.

The other two suspects detained on Wednesday are former Chief Financial Officer Burkhard Ley and Stephan Freiherr von Erffa.

[Bloomberg]

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