Wirecard, the fintech behind a $2 billion accounting scandal, leaves the DAX by August 21 after a new rule kicks in

• German fintech Wirecard will be removed from the DAX blue chip index after a new rule kicks in on August 19.
• German stock operator Deutsche Boerse said all German insolvent firms will be removed from DAX, with 2 days trading notice, effective August 19.
• Wirecard filed for insolvency in June after an audit revealed a $2 billion-hole in its accounts.

German fintech Wirecard, which was brought down by $2 billion accounting scandal, is one of many insolvent firms that will be removed from DAX, according to a new rule announced Wednesday.

German market operator Deutsche Boerse said insolvent companies will be dropped from German blue chip DAX Index, with 2 days' notice starting from August 19.

It added the new index composition will be announced after this on August 19 and brought into effect on August 21.

Deutsche Boerse said in a statement: "The affected indices will be calculated with the new composition as of 24 August 2020. Given the current situation, these rule changes would apply to Wirecard AG. "

The announcement comes after a few months of dramatic events surrounding the company, which ran an electronic payments system and went bust, after auditor EY at the time refused to sign off on Wirecard's 2019 accounts, because of a missing $2 billion.

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Wirecard, once a markets darling, became the centre of Germany's biggest accounting scandal.

The company filed for insolvency in late June, and its CEO Markus Braun was arrested on suspicion of market manipulation and false accounting practises.

The firm had said its missing cash was being held in two banks in the Philippines, but the central bank of the Philippines subsequently denied the claim.

Three former top managers have been arrested on suspicion of fraud and racketeering and on Thursday, German prosecutors appealed on television for information on the whereabouts of Jan Marsalek, a former Wirecard boss who was believed to be outside Germany, Reuters reported.

Wirecard is still continuing its business activities despite filing for insolvency. Its shares were last down 11% on the day at 1.43 euros in mid-morning trading in Frankfurt. Before the hole in its accounts came to light in June, Wirecard shares were changing hands for nearer 130 euros.