Markus Braun, the ex-CEO of Wirecard, a German digital finance commerce platform, was arrested for having inflated the company’s balance sheet.
The CEO was arrested on suspicions of having raised balance sheets and sales through phoney transactions in order to make the business look attractive to customers and investors. Prosecutors believe Braun may have worked with other perpetrators.
Braun is expected to be released on Tuesday with a bail of $5.7 million. On Monday, Wirecard released that a quarter of its assets, around $2.1 billion, did not exist, to begin with.
Additionally, the company removed its preliminary reports for 2019, the first quarter and profit forecast of 2020. Also Read– Facebook takes down posts by President Trump
The scandal came to light last week when the auditor of Wirecard could not find the funds in trust accounts and refused to sign off on the financial reports. The scandal is raising questions as to how auditors and regulators missed the irregularities similar to those of Enron, an American energy giant that went bankrupt in 2001.
Braun resigned from his position at the company on Friday saying that the company may have been a victim of fraud. A few days later, Jan Marsalek, the chief operating officer of Wirecard, was fired.
Europe’s most promising tech firms
Wirecard was founded in 1999 and was considered one of the Europe’s most promising tech firms. The company processes digital payments for customers and businesses and also sells data analytics services.
Braun was a leader of the company since 2002 and served as chief technology officer before becoming the CEO.
The company is now in deep trouble as a frantic search for the money hit a dead-end in the Philippines over the weekend. The company’s shares took a big hit on Monday and lost 85% off its share price.