German prosecutors arrest head of Wirecard's Dubai unit
German prosecutors said on Monday they had arrested the head
of a Dubai-based subsidiary of Wirecard, widening the circle of suspects in a
multi-billion-dollar fraud investigation into the collapse of the payments
company. The Munich prosecutor's office said in a statement it had questioned
the chief executive of Cardsystems Middle East FZ-LLC earlier in the day and
arrested him on the basis of a warrant.
The executive had travelled from Dubai and turned himself
in, prosecutors said, without naming him. Unless defendants are publicly well
known, their identity can be protected under German law to avoid prejudicing
legal proceedings. The arrest was made on suspicion of conspiracy to commit
fraud, attempted fraud and aiding and abetting other crimes, prosecutors said.
They said there was a risk that he would flee or tamper with evidence.
Wirecard filed for insolvency last month owing creditors 4
billion euros ($4.5 billion) after disclosing a 1.9 billion euro hole in its
accounts that its auditor EY said was the result of a sophisticated global
fraud. Investigative journalists and speculators had long highlighted
Wirecard's reliance on an obscure trio of third-party acquiring partners - one
of which was Cardsystems - to generate the bulk of its reported revenue and
profit.
Wirecard's creditor committee was meanwhile set to convene
for the first time on Tuesday, people close to the matter said. INVESTIGATION
GATHERS PACE
The latest arrest came after police and public prosecutors
raided Wirecard's headquarters in Munich and four properties in Germany and
Austria last Wednesday as they widened their investigation. Prosecutors have
said they are investigating Wirecard's Chief Financial Officer Alexander von
Knoop and Chief Product Officer Susanne Steidl, in addition to former Chief
Executive Markus Braun and chief operating officer Jan Marsalek.
Wirecard did not immediately respond to a Reuters request to
comment on behalf of von Knoop and Steidl. Braun has been released after
posting 5 million euros bail. Marsalek's whereabouts are unknown and his lawyer
is declining requests for comment.
Creditors will convene on Tuesday to discuss the latest on
the fraud investigation, as well as planned asset sales with which insolvency
administrator Michael Jaffe hopes to recoup at least a fraction of the money
owed, people close to the matter said. One of the people said that Jaffe was
likely to raise only about 400-500 million euros for Wirecard's assets,
including about 100 million euros for its banking unit. That works out at at
about 10% of the total they are owed.
Wirecard's lenders will be represented by ING and German
regional bank LBBW, while bondholders will be represented by a law firm
appointed by Cyrus Capital, people close to the matter said. Holders of other
securities have named German law firm Tilp to the creditor committee, while
employees will also be represented, the people said. The members of the
creditor committee declined to comment or were not immediately available for
comment.
Comments
Post a Comment