Markus Braun, CEO of the technology and financial services company Wirecard, poses in the company headquarters in Aschheim near Munich, southern Germany, on September 18, 2018. (Photo by Christof STACHE / AFP) (Photo credit should read CHRISTOF STACHE/AFP/Getty Images)
CHRISTOF STACHE | AFP | Getty Images
Wirecard CEO Markus Braun has stepped down amid a deepening accounting scandal that has rocked the company’s share price.
The German payments firm said in a brief statement Friday that Braun had resigned “with immediate effect” and that James Freis would take his place as interim CEO.
It comes just a day after Wirecard admitted that auditors at EY couldn’t find 1.9 billion euros ($2.1 billion) of cash on its balance sheet. The firm was forced to postpone its 2019 annual report — the fourth time it has done so this year.
It also warned on Thursday that, if it did not provide consolidated financials by Friday, approximately 2 billion in loans could be called in. There are fears the company could go insolvent by the weekend.
Shares of the firm have collapsed in recent days. On Thursday, Wirecard stock plummeted more than 60%, while on Friday it began the trading session down more than 40%.
Following the news of Braun’s resignation, Wirecard shares pared their losses somewhat, but were still down around 34%.
The news follows an extensive investigation by the Financial Times into the Munich-based payments processor’s accounting practices. Several reports by the newspaper highlighted a series of allegedly dubious transactions made across different units to potentially mislead auditors.
The company has repeatedly denied the FT’s allegations and even sued the newspaper over its reporting, accusing it of colluding with short-sellers.
Wirecard did not immediately respond to a request for comment when contacted by CNBC Friday, but in a video posted online, Braun — before his resignation — said it “cannot be ruled out” that Wirecard was itself the victim of “considerable” fraud.
This is a breaking news story and will be updated shortly.