Markus Braun, the former chief executive of Wirecard, has been arrested over the charges of false accounting and market manipulation.
According to a statement of Munich prosecutors, Braun was involved in artificially inflating the balance sheet of the company and also revenue to make Wirecard look attractive to the investors and clients.
Though the enforcement suspects that he colluded with others for manipulating the books, no other arrests have been made yet.
Fall of a giant
Wirecard’s woes started last week as its auditor Ernst and Young could not find €1.9 billion (around $2.1 billion), thus delaying the annual report publication of the company.
Following that, Braun stepped down from his position on Friday, and James Freis, the company’s chief compliance officer, who joined the company last Thursday, took charge as the interim CEO.
Braun was running the fintech company since 2002.
All this cannot be a single man’s doing
The arrest came as the company issued a statement on Monday saying that the missing cash might have never existed.
“The Management Board of Wirecard assesses on the basis of further examination that there is a prevailing likelihood that the bank trust account balances in the amount of 1.9 billion EUR do not exist,” the company statement read.
The funds reportedly went missing from the Bank of the Philippine Islands is one of the two Asian banks where Wirecard said it had deposited money.
Before stepping down as the CEO, Braun also issued a video statement defending the company from any wrongdoings and also added that “Wirecard has become the aggrieved party in a case of fraud of considerable proportions.”
Meanwhile, Wirecard shares continue to plunge in the market and shed 84 percent of its value since last Thursday.