Wirecard Lies About Billions In Bank Loses Over 70% Of Value
Wirecard CEO Markus Braun has resigned after two banks in the Philippines who were meant to be holding $2 billion for Wirecard said that they were never given the cash to hold, according to a report by The Wall Street Journal.
Braun has been the CEO and chief technology officer of Wirecard since 2002. He also controlled about 7 percent of the company’s shares, making him the company’s largest shareholder.
“The confidence of the capital market in the company I have been managing for 18 years has been deeply shaken,” Mr. Braun said. “With my decision, I respect the fact that responsibility for all business transactions lies with the CEO.”
Originally, in a company video, Braun tried to deflect blame for the missing money, stating that Wirecard may have been the victim of fraudulent activity. Ernst & Young GmbH were originally suspicious as the whereabouts of the money, which is what delayed the 2019 annual financial reports.
The banks in the Philippines have stated that the documents claiming the existence of the money were falsified.
James H. Freis, who was a member of Wirecard’s management board, will take over as interim chief executive.
The announcement of Braun’s resignation adds to a series of pitfalls that the company has faced since growing into one of Europe’s biggest tech successes. Shares in Wirecard fell another $1.4 billion in market value after the announcement on top of the $9 billion lost earlier this week. Within two days, the shares have fallen close to 72%.
Wirecard says that they are engaged in “constructive discussions with its lending banks with regard to the continuation of the credit lines.” This is in reference to the $2 billion worth of credit lines that can be cancelled on Friday due to the delayed reveal of their 2019 financial results.
The company also suspended its chief operating officer Jan Marsalek without reason earlier this week.
Read the full report here.