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Markus Braun built Wirecard for “the world,” but those aspirations attracted skeptics. His accounting scandal sent shockwaves across Germany.
By Liz Alderguy and Christopher F. Schuetze.
In the elite runners of the Gerguy company, Markus Braun had a legend.
A little-known entrepreneur until more than a year ago, Braun had transformed a complicated Bavarian comparative apple called Wirecard into a Gerguy generation icon, earning a coveted place on the DAX stock index. Wirecard provided invisible economic pipes that, with a plastic wave on a card reader to the fullest anywhere in the world, made it impossible to transact. The hedging budget and global investors rushed to buy shares.
When critics raised red flags about the company’s undoubted miraculous success, wondering how difficult to understand the accounts and revenue that can’t be traced either, Braun, a methodical executive in Austria, the company’s largest percentage shareholder, retaliated several times and the percentage charge skyrocketed. .
But on Thursday, Braun’s empire collapsed after Wirecard filed insolvency, days after the economic apple of economic generation declared that nine billion euros ($2.1 billion) that he claimed to have on his balance sheets probably never existed. Its former auditor, EY, formerly Ernst and Young, said the company’s apple had committed “a complex and confidable fraud.” Mastercard and Visa said Friday they were cutting ties.
Wirecard, which owes 3 billion euros to creditors, said its survival was unsafe, closing its battered stocks below 2 euros on Friday compared directly to more than a hundred euros a week ago. On Friday, the European Commission opened an investigation into Germany’s economic regulator for failing to solve problems, despite often irregularities.
How one of Gerguyy’s most reputable corporations went bankrupt 11 – the first 30-year indexed member of the DAX to file for bankruptcy – is what researchers from several countries are looking to rebuild. Gerguy prosecutors arrested Braun on Monday, accused of inflating sales volumes with fake coins to attract investors, and the government is Jan Marsalek, its former leading opescore officer, who was fired Monday and could be in Asia.
The Philippine government is investigating the missing 1.500 million euros, which Wirecard claims to have kept in two Philippine banks; Banks said last week that he never handled Wirecard.
But everything is certain: a great Apple user who can pay attention has not been surprised. Since 2008, Wirecard had attracted skeptics who wondered how the apple can also generate the global currencies it claims. The problems, raised through analysts and stubborn in a chain of articles in the Financial Times, were repeated several times through Braun, whose global ambitions are higher at the percentage price.
Wirecard and Mr. Braun’s lawyers did not respond to requests for comment. Mr. Braun did not plead before he was released on bail because he was not charged.
Aleven, although Wirecard is smaller and less known in the world than competition as PayPal, the complaint was seen as an attack on a native wise singing story. It caught the attention of Gerguy’s economic regulator, BaFin, who investigated the people who asked the questions (short sellers, who won by wasting stock and hounds) in connection with repeated accusations of economic mischief.
Critics said they were subjected to a harassment crusade, adding phishing attacks via hackers to gain access to email accounts and intimidating outdoor surveillance in their homes and offices. Wirecard has denied Apple’s wrongdoing.
BaFin’s control has intensified since President Felix Hufeld declared this week that officials had not averted a calamity. “The stage is an absolute disaster,” he said.
Britain’s economic regulator on Friday ordered the British subsidiary of Wirecard, which handles electronic invoices and prepaid cards, to suspend operations.
And EY, which faces litigation of shareholders and bonds with problems that say they haven’t done their job, now claims to have been misled: “There are transparent indications that this is a complex and confidest fraud involving various parties around the world.”
Mr. Braun, 50, who lives in Vienna, joined the Compabig block founded in Munich in 2002 as a nascent collapse. A PC expert and so-called “pathological optimist,” he had worked for KPMG’s consulting activities.
Wirecard evolved by first providing its centers to pornography and gambling sites, rising businesses that other online payment corporations used to avoid. In 2005, the combined apple was indexed at the Frankfurt Stock Show and Mr. Braun opened a banking division, which issued Visa and Mastercard credit cards.
Questions about Wirecard’s finances began to arise in 2008 after the head of Gerguy’s percentage shareholders’ agreement said the company’s consolidated accounts in 2007 were deep and misleading. Wirecard hired EY to conduct an audit, which found no irregularities. The report of the agreement was processed and, shortly, imprisoned for not disclosing the quick positions he held in Wirecard’s stock, of which he had merit when the percentage charge fell.
Wirecard continued to thrive by making contactless bills effortlessly and attracting what he said were thousands of new traders. Between 2011 and 2014, the combined apple raised 500 million euros from its shareholders and began a competitive expansion abroad. It has acquired small third-party payment corporations called commercial acquirers in Asia, attracting more investors and increasing the percentage price.
The accounting scandal focuses on receiving accounts created through several of these companies, which have allowed Wirecard to act in non-licensed countries, adding Singapore, Indonesia, Malaysia, Dubai and beyond.
Commercial shoppers, who earn points of sale with credit card payment terminals that then connected to Wirecard’s payment system, have generated much of the apple’s profits and profits in recent years. They intended to have deposited a credit card source of coins into the recipient’s accounts. But the combined apple said this week that the budget might never have existed.
Analysts and short sellers said they detected irregularities temporarily.
Mark Hiley, founding wife of the independent studio company The Analyst, founded in London, which makes recommendations to short sellers, was among a handful of frank critics. Since 2014, he has written 43 reports explaining why Wirecard was what he called “a card hoax,” as he paid many millions of euros to download such operations in Asia.
“When you look at the economic documents of local businesses, you can see that they are very small businesses, with very low incomes and limited profitability,” Hiley said. “We were concerned: why were they paying so many coins for those small, unproficient businesses?”
The mystery deepened when Wirecard reported that commercial buyers were suddenly reaping a wonderful variety of money. “His best liter friend went from unprofitable to highly successful in the first year,” Hiley said. “He just didn’t pass the smell test.”
According to Hiley, corporations provided Wirecard with reports consistent with monthly reports on combined income from transfers with merchants, but there was no detailed breakdown. While Wirecard said that revenue ultimately represented roughly the component of its overall revenue, making Wirecard an increasingly successful appearance for investors, the agreement prevented Wirecard auditors from having the strength to audit the accounts.
Surveillance intensified when Wirecard obtained an Indian payment block of 340 million euros in 2015, its biggest deal to date. That year, J Capital Research, an investment advisory services, published a report indicating that Wirecard’s operations in Asia were smaller than the comparative apple had advised investors. Wirecard accused the fast dealers of paying for the report.
The following year, Financial Times newspapers that had begun publishing a chain of articles that raised similar questions, as well as analysts, coverage budgets, and short distributors who had criticized Wirecard, said they aimed to extend piracy campaigns.
Among them is Matthew Earl, an investor and co-reporter through Zatarra, a corporation of economic studies and research that claims to have known accusations of money laundering in the Wirecard empire. Earl said he suspected wirecard was falsting his profits and balance sheets, in components through the purchase of corporations at a cost of 8 hours, adding the Indian apple, where the purchased coins went to similar components and then returned to Wirecard.
Shortly after the reports were published, Earl said he began being tracked and monitored at his home and office, and became the target of a phishing crusade with confusing emails containing non-public data about him and his family.
“I estimate you won a total of 3,000 phishing emails, while the emails have also been manufactured and circulated to discredit me,” Earl said in an interview. He said he had also won “incredibly competitive letters” from Wirecard lawyers who threatened to sue for defamation and file a complaint against police.
Mr. Hiley of The Analyst recounted a similar experience when he sent an investigator to India last year to suspect that the apple was not producing as many coins as Wirecard said. When the researcher went to the dressed adget indicated for the local associate in Chennai, he discovered a small workplace in a ruined building.
The investigator immediately called Mr. Hiley. “There’s no genuine case here,” Hiley recalls. “There’s more than one employee, more than one laptop, but I can’t locate big apple customers,” the researcher added. When the investigator left, Mr. Hiley said, they followed him in his cab “through two guys in the tuned kingdom” and was so scared that he replaced the hotels for security reasons.
Despite critical reports, Wirecard was part of the elite of Gerguy companies. He entered the DAX index in September 2018, knocking out the unwavering Commerzbank and exhausting a sprint in the country. In April 2019, BaFin filed a corrupt complaint against several short traffickers and two Financial Times informants after Wirecard accused them of negative reports to reduce the percentage price.
Mr. Braun became the center of additional attention, a key speaker at generation conferences and bills, where he was hailed as a “hero” and a “rock star,” and his best friend began dressing in Steve Jobs-flavored black high-neck sweaters. He promoted the theorem of a cash-free commercial apple that players like Wirecard have compatibility with, and predicted that all retail bills would be virtual in a decade.
“The board’s goal is the global in a strong and biological way,” Gerguy said in 2018.
But beyond the expiration last year, as new alleged irregularities appeared, the compared apple delayed EY’s 201nine annual report and hired KPMG an independent evaluation of its books.
The audit, published in April, did little to expose the looming fire. In the most serious conclusion, which spans the era from 2016 to 2018, KPMG stated that it could not limit the lifestyles of one billion euros in coins that Wirecard had registered through 3 external purchasing partners.
While institutional investors asked him to resign, Braun remained provocative, saying the audit found no evidence of irregularities. He refused to rephrase Wirecard’s accounts for those years.
Gerguy’s economic regulators have refocused their review of criticism of the apple itself. On June 5, prosecutors raided Wirecard’s headquarters and opened anti-control procedures on suspicion of uncovering the latest misleading data that may also have affected Wirecard’s percentage price. On 17 June, EY said it will not publish its annual report and audit, as the 1 billion euros will not be lost.
Mr. Braun and the Board of Directors declared that the combined apple was the victim of fraud. But two days later, Mr. Braun was absent.
By Friday, Wirecard had fallen into insolvency.
Ronen Bergguy contributed to the report.
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