Wirecard

Hi, I'm Professor Susan Smith of UCL School of Management and this is a talk about Wirecard.

Wirecard was the payment service provider and a member of Germany DAX. That's the sharing DAX for Germany's leading stocks. At its peak, it was worth €24 billion. It filed for insolvency in June 2020, making it the first time a current DAX member had filed for insolvency and it collapsed with €3 billion of debt. The sudden demise followed an announcement a week before by EY companies auditor that €1.9 billion we're missing. This was stimulated by a report from KPMG, which raised concerns about Wirecard's financial reporting and profits from 2016 to 2018. The company's meteoric growth had been fueled by accounting fraud that remained hidden for an extended period. At the center of the scandal is former CEO, Marcus Braun, who joined the company in 2002, injecting cash at that time and making him a primary shareholder. It grew very rapidly over the following years, rolling out its electronic payment processing solutions globally. In March 2022 CEO Marcus Braun was charged by the Munich Public Prosecutor with fraud, breach of trust, and counting manipulation. Now faces up to 15 years in prison if found guilty. Jack Marsalek, the former Chief Operating Officer, has been on the run since June 2020, and can't be charged in his absence under German law.