CEO of German fintech Wirecard resigns amid cash crisis
Mark Braun, the CEO of Wirecard AG, the Germany-based fintech that rapidly expanded its global footprint in recent years issuing multicurrency payment card products, resigned Friday amid allegations of a major accounting scandal.
Braun, who has been Wirecard CEO since 2002, quit the day after reports surfaced suggesting Wirecard is missing $2.1 billion in cash, which concerned lenders and caused shares to crash.
James Freis, who recently joined Wirecard from Deutsche Boerse AG is acting as Wirecard’s interim CEO. Freis previously served as a director of the U.S. Treasury’s FinCEN unit enforcing financial regulations.
Wirecard’s banking arm issues credit and debit cards via licenses with Visa, Mastercard and JCB—primarily through private-label cards and e-wallets—and processes transactions for hundreds of global operators including Asia’s ride-hailing service Grab.
Wirecard’s practices in recent years invited scrutiny from the press and investors, but Wirecard repeatedly denied wrongdoing after conducting two separate independent audits.
This week two banks in Asia where Wirecard claimed to have funds denied any business relationship with the company.
BDO Unibank and Bank of the Philippine Islands denied that Wirecard is a client, despite Wirecard documents—allegedly forged—suggesting otherwise.
Wirecard on Friday said it’s working with its other banks to restructure loans.
The fallout from Wirecard’s problems could create opportunities for rivals in the card-issuing, merchant and acquiring arenas, Sanjay Sakhrani, a KBW analyst, said Friday in a note to investors.
“One of the paths to resolution could be a potential sale,” Sakhrani wrote, noting that Wirecard’s business operations and customers remain intact despite the company’s current liquidity crisis.