Wirecard, the German Payments giant embroiled in €1.9 billion ($2.1 billion) scandal, has filed for insolvency, the company announced on Thursday.
“The management board of Wirecard AG has decided today to file an application for the opening of insolvency proceedings for Wirecard AG with the competent district court of Munich (Amtsgericht München) due to impending insolvency and over-indebtedness,” the company said in an official statement.
This came after the company revealed that the missing funds might be the result of false entry in the books which resulted in the arrest of its former chief executive Marcus Braun on Tuesday.
He is now out on a bail after making a deposit of €5 million ($5.61 million).
A quarter of the annual revenue went missing
Despite being one of the fastest-growing fintech firms, Wirecard was riddled with controversies. The most recent one, which now pushed the company towards insolvency, came last week when Ernst and Young revealed that €1.9 billion ($2.1 billion) in cash went missing.
Though Braun tried to defend the company saying that Wirecard became an “aggrieved party in a case of fraud of considerable proportions,” he was ousted on Friday, and a newcomer was handed over the charge.
Braun has been charged with false accounting and market manipulation to woo Wirecard’s investors and clients.
The insolvency precedes followed the suspension of the trading of the company’s shares on the Frankfurt Stock Exchange .
Prior to the scandal, last week, Wirecard stocks were trading at over €100, but as of press time, each Wirecard share is valued at €2.93.
Notably, Wirecard has become the first DAX member, the blue-chip index of Germany, to go out of business. This might impact a large number of firms as its services were used by many customer-faced payment providers.
