Munich prosecutors confirmed on Monday that the head of a Dubai-based subsidiary of Wirecard, Cardsystems Middle East FZ-LLC, has been arrested on suspicion of aggravated fraud.
The unnamed executive turned himself in just after returning from Dubai and after a warrant for his arrest was issued. German media have identified him as Oliver Bellenhaus and he joins three other managers at Wirecard, including CEO Markus Braun. They remain under investigation in an accounting scandal that centers on a missing sum of $2.1 billion.
According to a recent article on the Financial Time, CardSystems was effectively a one-man operation run from an apartment in the Burj Khalifa, the world’s tallest building. However, CardSystems contributed a quarter of Wirecard’s revenue and earned €69 million in 2017, approximately 40 percent of the company’s total profits.
Also in the frame over the scandal are Jan Marsalek, who had managed the day-to-day running of the company, as well as the former financial manager in south-east Asia and a trustee who was responsible for managing the business with third-party companies. These were mainly in charge for the company’s missing billions that was supposedly held in fiduciary accounts in Asia.
CEX.IO: 7 Years of Navigating an Evolving Crypto SpaceGo to article >>
Wirecard’s Austrian chief executive, who had led the fintech start-up since 2002, was released from police custody on bail after paying a deposit of €5 million. He is accused of inflating the company’s balance sheet to make it more attractive to investors and customers.
Wirecard’s head of Middle east operations was also arrested on counts of attempted fraud, as well as aiding and abetting other crimes. Prosecutors said Bellenhaus will be kept in custody as there was a risk that he would flee or tamper with evidence.
Once a star in the German financial sector, Wirecard shocked the financial world when it admitted last month that €1.9 billion, which makes up a quarter of the balance sheet, was missing from its accounts in Asian banks. The DAX-listed company has since filed for bankruptcy, and now likely on the verge of collapse.
Though allegations had dogged Wirecard for months the highly rated German business was valued at €24 billion just before it admitted to the hole in its balance sheet.
Wirecard, founded in Aschheim in southern Germany in 1999, had an annual revenue of more than €2 billion, €365 million in profit and employs over 6,000 people globally, with subsidiaries from Brazil to India.