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Wirecard CEO quits after billions go missing from balance sheets

Jill Petzinger
Jill Petzinger, Germany Correspondent, Yahoo Finance UK
Markus Braun, CEO of Wirecard. (Peter Kneffel/Picture Alliance via Getty)

Wirecard (WDI.DE) chief executive Markus Braun has stepped down, the German company said in a statement this afternoon.

Braun’s resignation comes after it was revealed this week that the company cannot account for €1.9bn (£1.7bn, $2.1bn) in cash missing from its accounts.

The news prompted its stock price to plunge by over 60% on the DAX on Thursday (18 June), and to collapse again on Friday by almost half, chopping around €10bn off its value in less than two days. The stock recovered slightly on news of Braun’s resignation.

Braun is the second head to roll at the troubled German company this week: on Thursday chief operating officer Jan Marsalek was temporarily suspended.

James Freis, who was already teed up to start as head of Wirecard’s new Integrity, Legal, and Compliance department will now take over as interims boss of the company.

Wirecard said on Thursday that its auditor EY had refused to sign off its accounts for 2019, as it could not confirm the existence of €1.9bn in cash balances on trust accounts.

"At present it cannot be ruled out that Wirecard has become the aggrieved party in a case of fraud of considerable proportions," the company chief executive Markus Braun said in a video statement released on Friday.

EY said more audits were required after two Asian banks that have been managing the company’s escrow were unable to locate accounts with about €1.9bn in funds.

“It is currently unclear why the two banks have stated to the auditor that the confirmations are spurious. The trustee has announced to Wirecard AG that he will clarify the facts of the matter with the two banks managing the trust accounts at short notice,” Braun said.

The company, which joined the German blue-chip DAX in 2018, said that the delay could mean billions in loans may need to be called in immediately.