Wirecard's chief executive resigned Friday as the search for $2.1 billion missing cash from the German payment company hit a blank wall in the Philippines and it scrambled to avail of a financial bailout from its lenders.
Markus Braun, who established Wirecard into one of Europe's most successful investments in financial technology before accounting issues saw it plunge in market value, leaves the company facing a possible cash crunch and mired in accusations of fraud.
Braun stepped down just moments after releasing a video that blamed Wirecard's problems on fraud, claiming he accepted accountability for all business transactions lies with the chief executive officer.
Braun is the second top ranking executive to exit at the beleaguered German firm this week. Chief operating officer Jan Marsalek was temporarily suspended on Thursday.
Wirecard disclosed in a brief statement that Braun quit "in mutual consent" with the company's board effective immediately. James Freis, who was picked to the management board of directors Thursday, was appointed interim chief executive.
Shares of the company fell 26 percent to 29.30 euros early Friday. They dropped 84 percent from their peak in August 2018 after the company became the subject of multiple accounting anomaly reports. Wirecard disputed the reports, which began in February 2019, and said it was the victim of speculations.
Wirecard's accounting miseries continued as the payments group canceled its earnings report, and top investors called for Braun's termination and an outside executive to step in and sort things out.
Braun's resignation comes just a day after the credit card issuer admitted that auditors at EY could not locate 1.9 billion euros ($2.1 billion) of cash on its balance sheet. The company's cancellation of its 2019 annual report is the fourth time this year.
EY disclosed that more audits were needed after two Asian banks that have been managing Wirecard's escrow were unable to trace the missing funds in its accounts.
Wirecard has also warned on Thursday that, if it did not issue consolidated financials by Friday, around 2 billion in loans may be called in. There are growing fears that Wirecard could go insolvent by weekend.
Wirecard, which joined the German blue-chip DAX in 2018, stated that the delay could mean that billions in loans may need to be called in as soon as possible.
According to Carola Rinker, a German economist specializing in accountancy fraud, Wirecard is a firm that has "caused serious damage to the credibility and trust of the DAX with international investors," Patricia Uhlig, John O'Donnell, and Neil Jerome Morales of Reuters, reported.
