The Departure and Arrest
In the end, it was just too much! After it became known that Wirecard had refused to grant the EY a certificate because the group was apparently lacking €1.9 billion, the share price plummeted by more than 60% within a few minutes. CEO Markus Braun spoke of a possible gigantic fraud in which Wirecard could have been the victim. Jan Marsalek, his long-time companion and fellow board member responsible for third-party business and the Asian business, had to leave immediately. Markus Braun followed suit. His departure will most likely not rescue the company.
On Monday, 22 June 2020 Markus Braun was arrested.
The Zatarra Reports
The case of Wirecard seems to develop into an unstoppable downward spiral. It all started with the so-called Zatarra Report issued in Feb 2016 (read the first report here) by Matthew Earl (@Titter), Fraser Perring (@Twitter) and his partners. After that, the powerful Financial Times and later the FinTelegram News took up the story.
After many denials, the company finally admitted on 22 June 2020 in a press release that the alleged €1.9 billion is missing. The funds probably never even reached Wirecard. Rather stayed with partners. In addition, the company intends to correct the preliminary figures for 2019 as well as the forecast for business until 2025. Austrian CEO Markus Braun and his long-time partner and board colleague Jan Marsalek have resigned. The remaining management and their consultants seem to struggle to clean up the past:
In a new press release, the company has now conceded that the third-party business has been incorrectly accounted for in recent years:
The Management Board further assesses that previous descriptions of the so called Third Party Acquiring business by the company are not correct. The Company continues to examine, whether, in which manner and to what extent such business has actually been conducted for the benefit of the company.
The share price has already lost more than 85% by Monday 22 June 2020 and is currently hovering around €14, which still seems excessive in view of the dramatic events and an insolvency scenario.
The public prosecutor’s office in Munich is investigating. It would be surprising if Braun was not immediately questioned by the public prosecutor’s office. In view of the enormous damage and the many false statements, it would even be appropriate to remand Braun in custody.
Follow the Wirecard Case
The German media, which have been uncritical of Wirecard and Markus Braun for so long, are already writing about a possible arrest warrant for him and Jan Marsalek. Wirecard’s endgame has only just begun.