Germany’s scandal-hit Wirecard to file for insolvency

Berlin (dpa) – Germany’s Wirecard, which has become embroiled in a scandal over a 1.9-billion-euro (2.1-billion-dollar) hole in its accounts, says it will file an application to launch insolvency proceedings.

The decision was taken by the management board of Wirecard AG, which will file an application with the district court in Munich “due to impending insolvency and over-indebtedness,” a statement from the company said on Thursday.

Shares in Wirecard, which provides digital payment services, have been in free fall since the company called off the announcement of its 2019 financial results last week due to the missing assets.

Its former chief executive, Markus Braun, was arrested on Tuesday on charges that he inflated Wirecard’s total assets and sales revenues. He has been released on bail.

Wirecard had claimed that the missing funds were held in accounts in South-East Asia, but the company later admitted the “prevailing likelihood” that these accounts never existed.

On Sunday, the Philippines’ central bank said none of Wirecard’s missing 1.9 billion euros had entered the country’s financial system, despite initial claims that the company had accounts at two of the country’s largest banks.

Both the BDO Unibank Inc and Bank of the Philippine Islands (BPI) have denied Wirecard was their client and noted that documents linking them to the money were fake.

Braun stepped down late last week and his one-time right-hand man, Jan Marsalek, was fired by the supervisory board.

Marsalek had been in charge of the day-to-day running of the business, which offers a number of services linked to e-commerce and digital payments, with clients including Dutch airline KLM and FedEx.

The Philippines’ Bureau of Immigration has said that it is checking travel records to determine whether Marsalek is in Manila, after the country’s justice minister ordered a money-laundering probe into the company.

Meanwhile, Singapore police are pressing on with investigations into Edo Kurniawan, the former head of accounting at Wirecard in the city-state.