View all newsletters
Receive our newsletter - data, insights and analysis delivered to you

CEO Pushed Out as German Fintech Admits: €1.9 Billion is Missing from Our Balance Sheet

"Spurious balance confirmations had been provided"

By CBR Staff Writer

The CEO of German payments and IT services specialist Wirecard has resigned with immediate effect — a day after the firm admitted that EY auditors couldn’t find €1.9 billion euros (£1.7 billion) of cash on its balance sheet.

Markus Braun will be replaced by James Freis as interim CEO.

“There are indications that spurious balance confirmations had been provided from the side of the trustee respectively of the trustee’s account holding banks to the auditor in order to deceive the auditor and create a wrong perception of the existence of such cash balances,” Wirecard told investors.

Wirecard employs 5,800+ persons in 26 countries.

The Bayern-headquartered company, founded in 1999, says it over 313,000+ companies rely on its services, including “well-known large, medium-sized, and small enterprises as well as start-ups in the travel and mobility, retail, e-commerce, banking, and telecommunications industries.”

It names Orange, Getty Images and Fitbit among its marquee customers.

The announcement on Thursday left Wirecard unable to publish its quarterly reports: its inability to provide convincing quarterly reports as scheduled means loans of up to €2 billion can be terminated today (June 19).

Content from our partners
Green for go: Transforming trade in the UK
Manufacturers are switching to personalised customer experience amid fierce competition
How many ends in end-to-end service orchestration?

As shares collapsed over 70 percent, the company said it is “in constructive discussions with its lending banks with regard to the continuation of the credit lines and the further business relationship.”

Wirecard, once on of Germany’s corporate darlings, is no stranger to auditing issues: in 2018 internal whistleblowers triggered an investigation by the company’s own compliance team into suspicious transactions in Asia. Among a series of allegations at the time: that Wirecard’s deputy chief financial officer and its head of Treasury approved four money transfers from Munich to Singapore, which appear designed to artificially inflate profits.

As the FT reports — the paper has broken a number of investigative stories on the firm’s finances — its accounting practices have been controversial since 2008. An anonymous report by short-sellers in 2016 triggered a fresh collapse in its share price, which subsequently quadrupled as the company pushed back hard against the allegations.

Websites in our network
Select and enter your corporate email address Tech Monitor's research, insight and analysis examines the frontiers of digital transformation to help tech leaders navigate the future. Our Changelog newsletter delivers our best work to your inbox every week.
  • CIO
  • CTO
  • CISO
  • CSO
  • CFO
  • CDO
  • CEO
  • Architect Founder
  • MD
  • Director
  • Manager
  • Other
Visit our privacy policy for more information about our services, how New Statesman Media Group may use, process and share your personal data, including information on your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.
THANK YOU