Markus Braun, the former Chief Executive of global payment processing firm Wirecard, has been arrested on charges of corruption and executive mismanagement.
His arrest follows on from devastating allegations that Wirecard leadership had artificially inflated the firm’s revenue and earnings metrics as he sought to increase investment and value of the Frankfurt Xetra-listed company.
Braun’s arrest over allegations of market manipulation and false accounting comes mere days after his resignation, which elevated uncertainty at the firm.
Furthermore, the firm’s share price dropped substantially as the market continued to react to the ongoing controversy.
Following Braun’s resignation, James H. Freis Jr was named interim CEO, after his appointment as a member of the management board yesterday.
Braun’s arrest has not been the only controversy to rock the payments firm, with reports showing that €1.9bn in Elrow accounts at two Asian banks had disappeared. It leaves Wirecard in a deeply worrying predicament as the once growing company has been forced to try to fill the substantial void left by the alleged fraud.
Consequently Wirecard was not in a position to publish its results to stakeholders this week, causing even more uncertainty and opening up the possibility for lenders to withdraw, should the results fail to be published.