Ex-Wirecard chief is arrested in Germany

THE former boss of scandalhit payments giant Wirecard has been arrested as fears for the firm’s UK arm grow. Markus Braun ( pictured) was arrested just hours after his former company admitted £1.7bn that was ‘ missing’ from its accounts may not exist.

The 51- year- old, who turned himself in on Monday night, has been accused of false accounting and market manipulation by German prosecutors.

It follows his resignation on Friday, the day after Wirecard confirmed auditors had found the huge hole in its accounts.

The crisis plunged the Bavariabased company’s finances into chaos overnight, with the firm currently locked in talks with lenders over £1.6bn it owes them.

That has also prompted concerns about the future of Wirecard’s British subsidiary, Wirecard Card Solutions Ltd, which has an office in Newcastle and reported 69 staff in its most recent accounts.

In the past it has provided services to UK fintech stars Monzo and Revolut, such as issuing customers with Visa and Mastercard-compatible payment cards. And it held £465.7m in customer deposits at the end of 2018. Both of the digital banks have since stopped using Wirecard for card-issuing services.

But Revolut is thought to have carried on using its payment processing services until as recently as late last year.

Wirecard’s UK arm reported annual revenues of £61.8m and a profit of £2.5m.

The company paid a dividend of about £ 5m to its parent, its accounts show. When asked about the future of its British unit, a spokesman for the company said yesterday: ‘ Wirecard is currently not making any further statements.’

Wirecard was plunged into turmoil last week when its auditor EY refused to sign off its 2019 accounts.

It followed almost two years of fraud allegations surrounding the company. Accountants were unable to locate £1.7bn that was supposedly held by two Asian banks in trust accounts – about a quarter of its balance sheet.

But the problems deepened on Monday when Wirecard issued another statement saying there was now a ‘prevailing likelihood’ that the money did not actually exist, after search efforts hit a deadend in the Philippines.

Allegations made against Wirecard over the past 18 months, many of them published by the Financial Times newspaper, have centred on whistleblower claims that some of its foreign divisions inflated their revenues and profits by booking sham transactions.

Yesterday, prosecutors in Munich said they had arrested Braun on suspicion of incorrect statements of data and market manipulation.

He was accused of doing so ‘possibly in collaboration with further perpetrators’ in order to ‘portray the company as financially stronger and more attractive for investors and clients’.

The scandal marks a dramatic fall from grace for Wirecard, seen for years in Germany as a home-grown technology darling.

Since the revelations emerged, the company’s shares have plunged by more than 80pc.