Dubai based Wirecard Executive Arrested, More May Follow

Multiple reports indicate that Wirecard’s (WDI:DE) top person in Dubai has been arrested. According to Reuters, the Munich prosecutor “questioned the chief executive of Cardsystems Middle East FZ-LLC earlier in the day and arrested him on the basis of a warrant.”

The unnamed executive reportedly flew to Munich and turned himself into the authorities.

Additionally, CFO Alexander von Knoop and Chief Product Officer Susanne Steidl are said to be suspects too.

Wirecard spectacularly collapsed following reports that it had misplaced €1.9 billion. Wirecard’s former CEO was arrested and its former COO has gone missing, apparently on the run.

Meanwhile, a report in the FT indicates that Wirecard has been losing money for years, according to auditor KPMG, and its operating performance is said to be even worse than anticipated.

The same report indicates that audits done by EY from 2016 to 2108 showed operating margins of 22% an EBIT of €439 million. Wirecard was also said to have “promised” investors 5X profits by 2025.

At one point Wirecard was a Fintech darling in Germany – a company that replaced Commerzbank in the DAX. Wirecard’s valuation topped €24 billion. Today, the company’s worth is measured in the hundreds of millions as shares cratered from over €100/share to around €2/share today.

Some pundits anticipate an acquisition of Wirecard assets while others wonder if there will be little left as the dust settles. Meanwhile, many once former customers have moved on to alternative payment service providers.

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