back to article Ex-CEO of fintech biz Wirecard arrested over missing money: Vanished €1.9bn may not have existed in the first place

Markus Braun, who resigned as CEO of financial services firm Wirecard AG last week, was arrested by police in Munich, Germany, on Monday and released after posting €5m ($5.7m) bail. Braun traveled to Munich from his home in Vienna, Austria, to turn himself in after German prosecutors issued an arrest warrant. Braun, who at …

  1. BebopWeBop Silver badge
    WTF?

    Careless of the lads - if they had been on the ball, they would have cashed in and disappeared by now. Funny that their auditors did not pick this up earlier and also that regulators did not act ealier when EY stated that they could not reconcile the accounts. I do wonder whether the 'magic' of Fintech blined them? Not that this is an area I have much knowledge of. Using Monzo as a very convenient 'small cash ' account is as far as I go.

    1. Julz Silver badge

      Difficult to cash in a lack of money...

    2. Anonymous Coward
      Anonymous Coward

      They just followed the new normal playbook. Deny everything, sue your accusers, bribe as many influencers as possible to diffuse your message, call everything else fake news. Post-truth post-shame.

      1. W.S.Gosset Silver badge

        Cf. Autonomy

    3. Arthur the cat Silver badge

      Funny that their auditors did not pick this up earlier

      Auditing companies, especially the big ones, have got fat and lazy. A savvy (and bent) CFO can usually run rings round them for a few years.

    4. c1ue

      Every single big company fraud was performed in the presence of big company auditors: Worldcom and Enron being the most notable. Only once has a big company auditor paid for its failure: Arthur Anderson.

      1. W.S.Gosset Silver badge

        Spot on.

        Speaking as an ex insider, a Big 5 audit is worthless; if you want real professionalism AND at a fraction of the price, go with a 2nd Tier firm. Eg, PKF.

  2. Pascal Monett Silver badge

    Wow. €26bn lost in two years

    Now that is impressive mismanagement.

    I wonder how it got to that point, and why the existing board hadn't been sacked last year (or the point at which 50%, or €13bn, had been erased from stock value).

    When you have stock, you have investors and, if I was an investor in that company, I would be screaming bloody murder after having half of my investment vanish in thin air.

    1. lglethal Silver badge
      Go

      Re: Wow. €26bn lost in two years

      Dont be confused by the share value compared to the ACTUAL value of the company's assets. The Share Value was as high as €26bn, but thats just what the investors think its worth. It only ever had assets worth €6.8bn. Maybe, it sounds like ti never actually had assets worth more than €4.9bn.

      Just remember, according to share value, Tesla is a bigger company then General Motors despite the fact that General Motors produces 1000 of times as many cars as Tesla, has huge numbers of factories, workers, IP, and all the jazz.

      Just because investors are delusional, doesnt change a firms ACTUAL value...

      1. Arthur the cat Silver badge

        Re: Wow. €26bn lost in two years

        Just because investors are delusional, doesnt change a firms ACTUAL value...

        Interesting philosophical debate. I'd argue the value of a company is exactly what investors will pay for it. Of course, it might not keep that value as events unfold and true asset values are revealed.

        1. teebie

          Re: Wow. €26bn lost in two years

          exactly what investors will pay for it is the price of a company, not the value.

          1. lglethal Silver badge
            Go

            Re: Wow. €26bn lost in two years

            Whats that old expression - knowing the price of everything, but the value of nothing...?

          2. Arthur the cat Silver badge

            Re: Wow. €26bn lost in two years

            If by value you mean some God's eye view, absolutely all information known and all future events counted in market value then it is unknowable(*) and pretty close to a stock market version of Kant's Ding an sich. Mere mortals have to work with the observables (company filings, stock price, relevant news, etc) so de facto the price is the value at that particular time. When I invest in the market I worry about whether a stock will make me money, not about some abstract quality of "value".

            (*) Unless you're the aforementioned deity(**).

            (**) Other types of deity are available(***), depending on supply.

            (***) Consult your spiritual advisor for advice on what sort of deity would suit you best.

        2. LDS Silver badge
          Devil

          "the value of a company is exactly what investors will pay for it"

          Only when you sell it in time.... "bubbles" do exist for a reason, and blow up for a reason...

        3. Warm Braw Silver badge

          Re: Wow. €26bn lost in two years

          Interesting philosophical debate

          The really interesting thing is that nothing is quite what it seems. Investors don't invest (mostly), they speculate on future dividend returns. Dividend returns are not directly related to the performance of the business, but to the desire of directors to keep their jobs. Actual investment in the business reduces the immediate speculative return. A lot of "assets" are intangible and have no inherent value.

          It's rather like attempting to value the second favourite in the 4.15 at Haydock Park.

          1. W.S.Gosset Silver badge

            Re: Wow. €26bn lost in two years

            Agreed but:

            ^dividend^dividend plus capital

            Cf. Berkshire Hathaway (zero dividends, by formal & fixed Policy)

  3. Anonymous Coward
    Anonymous Coward

    Time for a charity-work trip to India!

  4. dak

    Amateur

    German banks and precision, eh?

    I worked for one that was in the process of becoming a German bank from another, geographically-near location. Not only did one of their German customers erroneously deposit €1,3Tn (trillion) in two transactions, the bank actually advertised the fact.

    Their announcement of the mistake a couple of months later was rather quieter.

    1. W.S.Gosset Silver badge

      Re: Amateur

      Oh yes. Oh very yes.

      Used to have a BIG German-language client base.

      The reality of their various competencies was precisely the inverse of the intra-Germany memes/stereotypes.

      Austrians: just got on with stuff. Competently. Organised and coherent as companies.

      South Germans (eg Swabia): competent and coherent but slow. Turn out on close inspection to be hamstrung by a small proportion of parasites with a lot of internal clout. Chilling effect.

      North Germans: DO NOT TOUCH.

      SERIOUSLY, DO NOT TOUCH.

      1. W.S.Gosset Silver badge

        Re: Amateur

        I freely admit to a grim quiet satisfaction when Bank Gesellschaft Berlin went explosively bankrupt.

        The sheer lunacy of the accusations and demands and literal screaming, all based on toytown impossibilities requiring wild redefinitions of reality and resources, and very frequently flipping 180° in a week, and ALL with this strident VIRTUE, with the overall effect of actively damaging and degrading what we were trying to do and hence able to do for all the rest of the German-speaking client base never mind the rest of the world...

        Well. I had a certain grim satisfaction.

      2. W.S.Gosset Silver badge

        Re: Amateur

        Hamburg is an exception. Partial: be careful. But on average, as good as the South Germans.

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