Wirecard files for insolvency a week after €1.9bn went missing

Payments firm Wirecard has filed for insolvency proceedings – a week after disclosing that €1.9bn (£1.7bn) had gone missing.

The implosion comes less than two years after it was admitted to Germany’s prestigious DAX index of leading companies.

Once valued at as much as $28bn (£22bn), it is the first member of the DAX to go bust.

Former chief executive Markus Braun was arrested earlier this week
Image: Former chief executive Markus Braun was arrested earlier this week

Wirecard’s collapse leaves creditors owed €3.5bn (£3.1bn), a source told the Reuters news agency.

Shares lost 80% on the announcement and have now fallen by 98% since auditor EY refused to sign off on Wirecard’s accounts last week.

That resulted in the resignation of long-time chief executive Markus Braun on Friday.

On Monday, the company said it had concluded that the missing €1.9bn probably did not exist.

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Mr Braun was later arrested before being released on €5m (£4.4m) bail. He faces allegations of misrepresenting Wirecard’s accounts and market manipulation.

The ascent of the company, founded in 1999 and based in a Munich suburb, has been dogged by allegations that its revenues and profits were pumped up by fake transactions.

Wirecard is the first member of Germany's prestigious DAX index to go bust
Image: Wirecard is the first member of Germany’s prestigious DAX index to go bust

Wirecard said in a brief statement on Thursday that its new management had applied to begin proceedings for insolvency – a form of bankruptcy protection – at a Munich court, citing “over-indebtedness”.

It also said it was evaluating whether insolvency proceedings have to be filed for its subsidiaries.

In a later statement, it said that its continuation as a “going concern” was not assured.

Wirecard added that its banking unit Wirecard Bank was not part of the insolvency proceedings.

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