A 2nd Wirecard executive gets arrested following $2 billion accounting scandal
- German prosecutors questioned and arrested a second executive on Monday in relation to Wirecard's $2 billion accounting scandal.
- Prosecutors didn't name the executive but revealed that it was the managing director of Cardsystems Middle East, Wirecard's Dubai-based business.
- Wirecard's prospectus last year showed Oliver Bellenhaus to be Cardsystems Middle East's managing director.
- The German fintech's former chief executive Markus Braun was arrested last month on suspicion of fraud and market manipulation.
- Wirecard's stock has lost 98% since the start of the year and more than 90% since the hole in its balance sheet emerged.
German Prosecutors arrested a second executive of once profitable German fintech Wirecard on Monday in relation to a $2 billion accounting scandal, The Wall Street Journal reported.
The Journal said prosecutors did not name the executive, but revealed they interrogated the managing director of Cardsystems Middle East, one of Wirecard's Dubai-based businesses.
The executive was questioned and later arrested after he returned to Germany and handed himself in to authorities, The Journal said.
Wirecard's bond issue prospectus from last year named Oliver Bellenhaus as the managing director of Cardsystems Middle East.
Prosecutors said in a statement that the arrest was made due to "the urgent suspicion of conspiracy to commit fraud."
Wirecard filed for insolvency last month following a tumultuous week that saw the resignation and arrest of former chief executive Markus Braun on suspicion of market manipulation and false accounting practices.
Braun resigned after more than $2 billion of cash went missing from the company's balance sheet. The company said the money likely never existed, contradicting an earlier claim the missing cash was being held in two banks in the Philippines.
Later the central bank of the Philippines denied the claim. Wirecard is still continuing its business activities despite filing for insolvency.
The decision of whether to open insolvency proceedings is currently being reviewed and a provisional insolvency administrator is expected to be appointed soon.
The German payment processor's chief operating officer, Jan Marsalek, has also not been seen since seen the company terminated his employment in mid-June, and remaining executives said they believe he has absconded.
Wirecard's share price was down 28% on Monday to 2.37 euros ($2.68). The stock is down 98% since the start of the year and over 90% since June 18, when the company revealed the $2 billion gap in its balance sheet.