Connect with us

Entertainment

Wirecard CEO Markus Braun Arrested On Charges Of Inflating Company Value, Falsifying Company Financial Records

It appears that Kylie Jenner is not the only business owner to manipulate her company’s financial results (allegedly, of course). Markus Braun, a former CEO of Wirecard, has been detained. The accounts of the corporation appear to have lost $3.7 billion, and he is allegedly accountable for the scam.

Published

on

It appears that Kylie Jenner is not the only business owner to manipulate her company’s financial results (allegedly, of course). Markus Braun, a former CEO of Wirecard, has been detained. He is charged with inflating the company’s value, its sales, and creating fictitious transactions to make Wirecard more appealing to investors after it appears that $3.7 billion vanished from the company’s books. The $3.7 billion represents approximately a fifth of Wirecard’s assets, or it would if it weren’t a complete hoax (again, allegedly). Braun was granted a $5.7 million bail and let go from detention. The company was forced to retract its corporate results for the entirety of 2019, the first quarter of 2020, and its profit prediction for the full year 2020 as a result of this incident, and it is currently no longer in business.

CHRISTOF STACHE/AFP via Getty Images

In 1999, the year when Wirecard was established, It had long been regarded as one of Europe’s top and most promising tech firms. Wirecard employs about 6,000 employees in 26 countries across the globe. Both businesses and consumers can use Wirecard to process payments. Data is also sold by it. Markus Braun joined Wirecard as its CEO and CTO in 2002 after quitting his consultancy position at KPMG. With little over 7% of the company’s shares, he is the largest stakeholder.

Advertisement

Braun disclosed to Wirecard’s investors in 2017 that the business used cutting-edge artificial intelligence to evaluate data. This proved to be untrue. Actually, his team was creating regular spreadsheets to examine data. In early 2017, Wirecard acquired City Prepaid Card Services and relaunched it as Wirecard North America.

In 2018, Wirecard reported revenues of more than $2.2 billion, which was four times higher than the company’s 2013 earnings. The stock of Wirecard reached an all-time high of $218 in September 2018. In the same month, Commerzbank was eliminated from the top 30 German firms by Wirecard. The corporation had a market valuation of about $27 billion at that time.

With the purchase of Beijing’s AllScore Payment Service in late 2019, the company entered the Chinese market.

The audit turned out more than $3.7 billion in missing money from Wirecard’s accounts in June 2020. There was a frantic scramble to try and find the money but that went dead last weekend in the Philippines when that country’s central bank confirmed that those funds had never entered the country’s financial system. The company’s stock fell more than 85%, and Wirecard’s market capitalization fell to $1.9 billion. Wirecard made attempts to stave off its creditors, but in vain.

Advertisement

Now, according to the prosecution, Wirecard officials committed an organized, well-planned fraud to conceal the fact that the company had been losing money since at least 2015 while they were aware of it.

It all started to unwind in January 2019 when it was revealed that Wirecard forged and backdated contracts in Singapore. The company denied this, but the whistleblower remained adamant that the suspicious transactions were real. Then, toward the end of 2019, it turned out that profits and sales had been inflated. For market manipulation, the business is currently under investigation. The issue was dubbed a “complete disaster” by the regulator who oversees the supervisory board of the European Central Bank.

Advertisement