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Billions of Euros Scandal at Wirecard Technology Company

Billions of euro scandals occurred in the German-based financial services and payments technology company operating under the name Wirecard. It turned out that the company, which delayed its financial statements and withdrew some of its previous notifications, did not have about 2 billion euros in the escrow accounts. While the CEO of the company was detained, Wirecard entered the liquidation process and its shares traded on DAX fell 95 percent. The company, whose market value has decreased from 12.5 billion euro to 340 million euro, also owes 3.5 billion euro to creditors.

German payment company Wirecard, shown as the shining star of the Fintech world in recent years, is shaken by a historical scandal.

Markus Braun, former CEO of Wirecard AG, who withdrew his financials for 2019 and the first quarter of 2020 at the beginning of the week and revealed that his $ 2.1 billion (1.9 billion euros) cash asset was previously absent on his balance sheet. He was released on bail of 5 million euros after being detained by Munich prosecutors under the investigation. Markus Braun, CEO of Wirecard, resigned the week after the scandal appeared.

After the loss of 1.9 billion Euros from the digital payment company, the loss in the company’s shares traded on German stock markets exceeded 95 percent.

The market value of Wirecard, which was 12.5 billion euros on June 17, was officially upside down after the scandal appeared. The market value of the company, which fell to 1.5 billion euros at the close yesterday, has decreased to 345 million euros today. Thus, 97 percent of the company, whose market value has decreased from 12 billion euro to 340 million euro in the last 6 days, has become steam.

3.5 BILLION EURO DEBT TO CREDITORS

It is stated that Wirecard has a total liability of 3.5 billion euros to 15 banks, including 1.75 billion euro and 500 million euro bond investors to the liquidation process after the scandal.

“The money is gone. Maybe we can save a few euros for a few years, but we will erase the loan,” an official from the creditor banks told Reuters. said.

The scandal broke out after Wirecard’s admission that “1.9 billion Euros in the Escrow account is probably not there”, which often postponed disclosing its financial results. After the scandal that considered “a complete disaster” in the world of German finance and payment technologies, Wirecard, the payment methods organization that was once seen as the future of Fintech (financial technology), is now looking for ways to restructure it with commercial banks to survive.

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