Wirecard said management decided to initiate bankruptcy proceedings “due to impending insolvency and over-indebtedness.”.

Wirecard owes creditors 3.5 billion euros ($ 3.9 billion), according to a source close to negotiations with creditors. Of this amount, the company borrowed 1.75 billion euros from 15 banks and 500 million euros from investors in the bond market..

The fintech company collapsed less than two years after it was admitted to the prestigious German stock index DAX. Wirecard was worth $ 28 billion and became the first DAX company to go bankrupt.

Earlier, Wirecard reported that with its balance sheet lost 1.9 billion euros ($ 2.1 billion) of cash.

Another admission on Monday that there was probably no cash further exacerbated Wirecard’s problems as the company tried to negotiate with creditors to save the business..

Accounting irregularities first discovered by the Financial Times during its investigation last year also threaten to undermine the reputation of German financial regulator BaFin..

Wirecard said it is also evaluating the need for filing for insolvency for its subsidiaries. The company controls a bank in Munich as well as a card issuing unit in the UK..

Former CEO Marcus Brown was arrested in Munich on charges of falsifying company balance sheet data. Brown was released on € 5 million bail.

Wirecard files for bankruptcy

Brown, who led Wirecard for 18 years, turned a little-known payment processing company for online casinos and porn sites into one of the most advanced technology companies in Germany..

He helped with the inclusion of the firm in Germany’s prestigious DAX 30 index in 2018, displacing one of the country’s largest financial institutions – Commerzbank.

But since then, Wirecard’s share price has plummeted, dropping from € 100 last week to less than € 4 on Thursday due to additional revelations in the current accounting scandal. Wirecard shares plummet another 79% after trading was briefly suspended Thursday morning.

Using Wirecard, an attempt was made to locate the missing cash, allegedly in two banks in the Philippines. But this hunt for money was stopped after both banks reported they had no business ties with Wirecard, and the supporting documents turned out to be fake.. 

Law enforcement in the Philippines is also trying to find the former chief operating officer of Wirecard. Yana Marsaleka, a suspect who was fired from the company earlier this week.

Wirecard files for bankruptcy

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