German prosecutors have arrested the chief executive of Wirecardâ€™s Dubai unit Cardsystems

June 7, 2020

The highly publicised collapse of Wirecard has taken another turn with German prosecutors having arrested the head of the company’s Dubai-based subsidiary.

The unnamed executive had travelled from Dubai to turn himself in and had been questioned earlier in the day before being arrested on a warrant under the suspicion of conspiracy to commit fraud, attempted fraud and aiding and abetting other crimes, Reuters reported.

The prosecutors also reportedly feared that there was a high flight-risk and were concerned that he might tamper with the evidence.

The arrest of Cardsystems Middle East FZ-LLC chief executive is the last turn in a story that began in June when Wirecard filed for insolvency after disclosing that it was missing â‚¬1.9bn ($2.1bn) of its finances, which represented about a quarter of its finances and left it owing creditors roughly $4bn.

Several members of Wirecard’s leadership have already been arrested for their suspected involvement in the scandal, including former CEO Markus Braun who has since been released on a â‚¬5m ($5.66m) bail.

As FinTech Global has previously reported, the downfall of Wirecard has already caused massive ramifications for other FinTech companies. For instance, Wirecard filed for insolvency on Thursday June 25 and the following morning the Financial Conduct Authority (FCA) ordered Wirecard UK to freeze all of its assets and regulated activities. The announcement caught the FinTech companies relying on Wirecardâ€™s services unawares. Within the next few hours, ventures like Curve, ANNA Money and Holvi announced that all or parts of their services had been suspended, leaving customers unable to access their money.

They were able to resume business on Tuesday June 30 after the FCA allowed Wirecard to resume operational activity, following conversations with â€œWirecard UK and other authoritiesâ€ to â€œensure that the firm was able to meet certain conditions required to lift the restrictions we imposed on it.â€ That being said, companies like Curve and Revolut have announced their plans to migrate their services away from Wirecard.