Wirecard’s former CEO Markus Braun arrested

Mr Braun’s arrest is the latest blow for the company at the centre of what appears to be Europe’s largest fraud in years.

Markus Braun, former CEO of financial services company Wirecard. Picture: AP

Wirecard’s recently departed chief executive, Markus Braun, has been arrested by police, days after the German payments company revealed a $2 billion hole in its books.

Munich city prosecutors said he was arrested on Monday on suspicion of presenting false information. It was a swift turn of events for Mr Braun, who was Wirecard’s largest shareholder and served as CEO for nearly two decades until he resigned last Friday.

Mr Braun’s arrest is the latest rapid-fire blow for the company at the centre of what appears to be Europe’s largest fraud in years.

The company began to unravel last week when its auditors said that it couldn’t verify the money existed.

In earlier reports, German payments provider Wirecard said more than $US2bn missing from its balance sheet probably doesn’t exist, confirmation that its fast-growing online business was more of a mirage than a miracle.

The company, once considered Germany’s pre-eminent fintech player, has been left fighting for survival. It is now working to retain credit lines with lenders and cut costs or sell business lines to stay afloat.

Wirecard said its management board now believes there is “a prevailing likelihood that the bank trust account balances in the amount of €1.9bn ($US2.1bn) do not exist.”

The company said it was having “constructive discussions” with its lenders about debt due at the end of June. It hired restructuring specialist Houlihan Lokey on Friday.

Wirecard - an electronic payments business that provides software and systems that link retailers, consumers and the financial system - has promoted relationships with the likes of IKEA, FedEx and German grocery chain Aldi.

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