Markus Braun built Wirecard AG from an obscure firm based in a small town outside of Munich into a global electronic-payments giant, the Wall Street Journal reported. From its perch at the crossroads of online commerce, Wirecard extracted fees for processing credit-card transactions on behalf of businesses. It pushed into emerging markets, bought up smaller firms and struck partnerships to recruit more customers. In its financial statements, sales and profits ticked steadily upward. Wirecard claimed to process $140 billion of transactions a year on behalf of a quarter million businesses, making it a rival of Square Inc. and PayPal Holdings. It was briefly valued at more than any German bank. Then it came apart at light speed — an unraveling reminiscent of energy firm Enron Corp.’s rapid collapse nearly two decades ago. On June 17, Wirecard was valued at more than $14 billion. Eight days later, it filed for the German equivalent of bankruptcy. Wirecard revealed on June 18 that $2 billion it had told its auditors was in a pair of Philippine banks wasn’t there at all. The sum is equivalent to the company’s entire profit over more than a decade. The company and its auditors say that the missing money probably never existed. German regulators and prosecutors are digging into the company’s books to unravel whether one of Europe’s most promising financial-technology firms used fictitious revenue to inflate its sales and fool investors about the health of the company.
