Markus Braun - former Wirecard CEO

Wirecard CEO Markus Braun has resigned amid a deepening accounting scandal that has seen the company’s share price plummet by more than 80%.

Wirecard had previously delayed the announcement of its annual financial statements four times, and yesterday the company admitted that auditors at EY couldn’t find 1.9 billion euros ($2.1 billion) of cash on its balance sheet.

Mr. Braun’s immediate departure was announced in a short statement. Wirecard’s chief compliance officer, James Freis, will take up the CEO role in the interim.

Freis himself only joined Wirecard on Thursday via an emergency appointment to the board. He was due to commence his contract on July 1st.

Shares of the firm have collapsed in the wake of the scandal. Wirecard stock fell by more than 60% on Thursday, whilst Friday saw the price tumble a further 45%. The stock recovered slightly following the announcement of Braun’s resignation, but still finished the day more than 30% down.

The scandal was sparked by a Financial Times investigation into the Munich-based company’s accounting practices. One of the biggest allegations levelled at Wirecard is that its Singapore office used forged and backdated contracts to inflate revenue.

The company has repeatedly denied the allegations against it, and Braun initially claimed that he himself may have been the victim of fraud. Wirecard commenced legal proceedings against the FT over its reporting, accusing the newspaper of colluding with short-sellers. London-based Law firm RPC conducted an independent investigation and found no evidence of collusion with market participants.

Wirecard are currently in emergency talks with banks in the hopes of securing a financial lifeline. Reports state that the company has until the end of the day to strike a deal.

By admin