Former Wirecard Chief Executive Markus Braun has been arrested on suspicion of falsifying company revenue, prosecutors said on Tuesday.
Francis Maguire reports.
The former Wirecard CEO has been arrested on suspicion of falsifying company revenue, prosectors said on Tuesday (June 23).
Investigators said Markus Braun is suspected of making revenue appear stronger and more attractive for investors and customers.
Wirecard said Monday that 1.9 billion euros - or just over $2.1 billion - it had booked in its accounts likely never existed.
That black hole threatens to overwhelm the payments company.
Authorities in Munich said Braun would be released from custody as soon as he had posted 5 million euros in bail.
Prosecutor Anne Leiding.
"Regarding the sentence, it will essentially depend on how many cases there are, for example, and we do not know that yet or how often these incorrect balance sheets were used to get loans from other banks.
This is a very important factor that will affect any sentence." Braun turned himself in on Monday evening (June 22).
He is suspected of market manipulation by falsifying income from transactions with so-called third-party acquirers.
Wirecard said last week that auditor EY has refused to sign off on its 2019 accounts.
That because it couldn't confirm the existence of the 1.9 billion euros cash balances in trust accounts.
The German tech firm is now holding emergency talks with its banks - which are owed roughly 1.75 billion euros - aiming to stop a cash crunch brought about by the missing money.
The investigation marks a dramatic turn in fortunes for Wirecard.
It attracted some of the world's biggest investors before a whistleblower alleged it partly owed its success to a web of false transactions.
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