German payments firm Wirecard fell on Thursday amid a significant accounting scandal which has witnessed a $1.9 billion gap in its publications.
The company filed for bankruptcy at a Munich courtroom and stated its survival has been”not confident” with $1.3 billion of loans expected next week.
Wirecard’s former chief executive Markus Braun resigned Friday and was arrested days later on suspicion of the organization’s financing to make them seem fitter to investors and clients.
The company’s lenders stand to lose billions of euros in the scandal.
Shares in the company have shed up to 90 percent in a week.
The implosion occurred days following auditor EY refused to register Wirecard’s 2019 accounts, which resulted in Braun admitting the lost $1.9 billion didn’t exist.
“There are definite signs that this has been an elaborate and complex fraud involving several parties around the globe,” EY mentioned in an announcement on Thursday.
The darling of all fintech
Braun, who had been discharged from custody on a bond of 5 million euros, implied that Wirecard could itself be the victim of fraud.
The German company was once considered as a darling of their developing financial technology industry and had expanded its existence to Asia and North America.
Wirecard supplies the technology to consumers and companies to make cashless payments, a competitive and growing market worldwide.
However, the firm became the topic of multiple Financial Times reports regarding accounting irregularities in its Asian operations.