Prosecutors arrest three in Wirecard criminal enterprise
) on Wednesday, saying it suspected them of masterminding a criminal racket to fake the company’s accounts and bilk creditors of billions of euros.
The collapse of the high-flying financial technology company last month exposed a breakdown in oversight. Regulators for years ignored warnings from investigative journalists and market sceptics that Wirecard was inflating revenues and profit. This created a false impression of financial strength that enabled Wirecard subsequently to borrow 3.2 billion euros from banks and investors.
Braun, who quit after auditor EY said it could not verify 1.9 billion euros supposedly held in escrow on behalf of the third-party partners, was earlier arrested and released on 5 million euros bail. He has denied wrongdoing.Prosecutors are now investigating Braun and his suspected accomplices - who were not named - for organised commercial criminal fraud, breach of trust, false accounting and market manipulation.
Wirecard, which was worth $28 billion just two years ago, now has a stock market value of 220 million euros. The 3.2 billion euros it borrowed are now “in all probability lost”, Leiding said.
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