Wirecard Files For Insolvency Following $2 Billion Fraud Scandal

Online payments company Wirecard has filed for insolvency following a huge accounting fraud scandal hitting the company. The German based firm said last week that the $2.1 billion missing funds” most likely do not exist.”

The company said that at present it will still be operational by the Management Board saying, “The management board is of the opinion that continuation is in the best interests of the creditors,” it said in a statement.

“With the exception of a small development branch office, no insolvency applications have been filed by Group companies at present.”

Payments for merchants of the firm’s banking arm, Wirecard Bank, “will continue to be executed without restrictions,” it finished by saying.

However just a few hours after filling for insolvency in a court in Munich accounting firm Ernst Young (EY) said that the company had carried out an “elaborate and sophisticated fraud” across the world “with a deliberate aim of deception.”

But EY themselves are now coming under fire as the audit company of Wirecard for recent years, it is reported that a group of investors led by a German law firm are considering legal action against EY for failure to ensure proper audits during their work for Wirecard.

In the UK the financial watchdog the FCA said it has “frozen Wirecard’s operations there to protect its users’ funds.”

Markus Braun the founder and former chief executive officer of the company had been arrested on suspicion of falsifying accounts and is now currently on bail awaiting further investigation.