Wirecard files for insolvency after a devastating scandal that saw $2 billion go missing and its ex-CEO get arrested
- Wirecard, a once valuable German
fintechfirm, filed for insolvencyon Thursday as it battles a huge accounting scandal.
- Auditors said last week that more than $2 billion went missing from the company's balance sheet, and
Wirecardlater said the money likely never existed.
- Wirecard said on Thursday that it applied to begin insolvency proceedings in the Munich district court.
- On Monday, its former CEO was arrested on charges related to market manipulation and false accounting.
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The German fintech group Wirecard AG filed for insolvency on Thursday, less than a week after CEO Markus Braun resigned and was arrested on charges related to market manipulation and false accounting.
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It also said it was evaluating whether insolvency applications would have to be filed for its subsidiaries.
Ordinarily, a company files for insolvency when it fails to meet its financial obligations to lenders when debt payments are due.In Germany, an insolvency administrator has the option to continue the business as long there is hope of finding an investor that will acquire it. Wirecard's shares have fallen by about 90% since its auditor said last week that €1.9 billion, or about $2 billion, had gone missing from its balance sheet. Wirecard later said the money likely never existed.Advertisement
Braun was released on €5 million bail on Tuesday, though the German police are still investigating. The Munich prosecutor's office said it would "now look at all possible criminal offences," Reuters reported.Advertisement