“The Munich Public Prosecutor’s Office has arrested the resigned head of the scandal-ridden financial services company Wirecard. Markus Braun surrendered on Monday evening, the prosecutor’s office announced on Tuesday. He will be presented to the investigating magistrate later in the day, who will decide on detention.
Prosecutors accuse Braun of inflating Wirecard’s balance sheet and sales by making fake revenues. He had only resigned on Friday.
The accounting scandal concerns alleged air bookings amounting to 1.9 billion euros, which have pushed the high-tech company from the Munich suburb of Aschheim to the brink of the abyss.
Wirecard admitted earlier this week that the billions allegedly accounted for in escrow accounts in Southeast Asia were unlikely to exist. At the centre of the scandal are the former Wirecard finance chief in Southeast Asia and a former trustee who oversaw the allegedly non-existent business with third-party companies.
However, investigators now assume that there were associates or accomplices in the German company headquarters. Pre-trial detention may be imposed if the judiciary is at risk of escape or obscurity. The Munich Public Prosecutor’s Office has been investigating Braun for weeks, but initially only on suspicion of having misinformed investors in two ad hoc announcements.
Braun resigned after the scandal came to light. His former right-hand man Jan Marsalek was fired by the supervisory board. Marsalek had been in charge of day-to-day operations.
Altamaier: Process “anything but banal”
Federal Minister of Economics Peter Altmaier (CDU) calls for a swift investigation into the wirecard accounting scandal. “Wirecard is obliged to investigate and to put an end to any grievances,” Altmaier said in an interview with the news portal T-Online. “It has to be determined how it could have happened that billions of dollars have apparently dissolved into thin air, or may never have been there.”
In addition, it must be determined whether the existing legal provisions have been complied with – “or whether someone must also be held legally accountable for this,” Altmaier said. The process is “far from trivial.”
He warned of a loss of image for Germany as a business location. “It is very important to me that such a case does not happen again so quickly in view of trust in Germany as a banking location,” Altmaier said. “We would have expected such a situation everywhere – but not in Germany. That is why we must crack down where necessary.”
As with recent events in the meat industry, incidents of this kind are a problem for the image of Germany as a business location, Altmaier said. “We must not allow individual companies to destroy the reputation of an entire industry and thereby harm the country.”