# Wirecard (1999 – 2020)

- URL: https://girisimcikafasi.com/en/startup-graveyard/wirecard/
- Sector: Fintech
- Country: Germany
- Total funding: unknown
- Cause of closure: Fraud

## What did it do?

Wirecard was a German payments company that processed card payments for online merchants, issued physical and virtual cards and offered risk-management services. Listed on the Frankfurt Stock Exchange, it joined the DAX, Germany's benchmark index, in September 2018. It operated through numerous subsidiaries across Asia, the Americas and Europe.

## Why did it shut down?

For years the company's accounting was questioned by Financial Times reporting, short sellers' reports and whistleblower documents; Wirecard denied the allegations and took legal action against its critics. In June 2020, following a review by its auditor Ernst & Young, the company announced that €1.9 billion was missing, and a few days later the management board admitted the money most likely had never existed. The shares fell by more than 72 per cent, CEO Markus Braun resigned and on 25 June 2020 the company filed for insolvency on the grounds of over-indebtedness. The core business was sold to Santander in November 2020 for €100 million. Braun was charged with fraud in March 2022; he denies the charges.

## The story

On 18 June 2020 Wirecard made one of the gravest announcements a member of Germany's benchmark DAX index could make: following a review by its auditor Ernst & Young, €1.9 billion in cash on its books was missing. A few days later the management board admitted the money most likely had never existed. Two banks in the Philippines, where the funds were supposedly held, had already said they never held any such sum.

Wirecard was founded in 1999 as a company processing credit card payments for online merchants. In 2002, when it was on the verge of closing at the end of the dotcom bubble, Markus Braun put capital into the business and became CEO. Over the following years it grew through acquisitions and subsidiaries stretching from Singapore to Brazil and from the US to Turkey. In 2018 it reached $125 billion in transaction volume; that same year it replaced Commerzbank in the DAX, and at its peak its market value reached €24 billion.

Yet the questions had been there for years. From 2015 the Financial Times published articles challenging the company's accounting; the Zatarra Report in 2016 set out allegations of fraud and money laundering. At Wirecard's insistence, BaFin and Bavarian prosecutors investigated short sellers on suspicion of market manipulation; after the FT's reports in January 2019, BaFin banned short selling of Wirecard shares for two months. The whistleblower who supplied the FT with documents was Pav Gill, a legal counsel in Singapore.

The company filed for insolvency on 25 June 2020 on the grounds of over-indebtedness and sold its core business to Santander in November 2020 for €100 million. Braun was arrested in June 2020. In March 2022 Munich prosecutors charged him with fraud, breach of trust and accounting manipulation; at the trial that began in December 2022 Braun denies the charges, and the case continues. Former chief operating officer Jan Marsalek is a fugitive and on Europe's most-wanted list. In Singapore, courts sentenced two former finance executives in June 2023, and in January 2026 two people linked to €1.1 billion of fake balance confirmations issued for Wirecard, for falsification of accounts, to 10 and 6.5 years in prison respectively.

Wirecard was a case in which a growth story and the perception of a national champion stood in for scrutiny. While the regulator investigated the critics, the company's own figures went largely unquestioned.

## Lessons

- If a significant share of a fast-growing company's cash sits in third-party escrow accounts, do not trust the figures until those accounts have been confirmed directly with the bank.
- Answering critical reporting and whistleblowers with legal pressure does not solve the problem; deepen internal audit with an independent team.
- As a partner or customer, remember that a regulator shielding a company does not mean that company's numbers are right; do your own due diligence.

## Sources

- [Wirecard](https://en.wikipedia.org/wiki/Wirecard)
- [Wirecard: Scandal-hit firm files for insolvency](https://www.bbc.co.uk/news/business-53176003)
- [Former Wirecard chief executive charged with fraud](https://www.ft.com/content/c0bcaaab-546a-4e37-861e-2a29f28e1998)
- [Wirecard trial of executives opens in German fraud scandal](https://www.bbc.com/news/world-europe-63893933)
- [https://www.wikidata.org/wiki/Q587325](https://www.wikidata.org/wiki/Q587325)