Monday 6 July 2020 5:24 pm

Munich prosecutors arrest head of Wirecard's Dubai unit

Munich prosecutors have arrested the head of a Dubai-based subsidiary of Wirecard on suspicion of aggravated fraud.

Oliver Bellenhaus is the second senior Wirecard employee to be arrested after the former chief executive Markus Braun last month, who has since been released on bail.

Read more: Audit shows Wirecard’s core business ‘has been lossmaking for years’

The firm Bellenhaus ran, CardSystems Middle East, was the largest individual unit within Wirecard and purported to contribute a quarter of its revenue and approximately 40 per cent of profits in recent years, according to the Financial Times.

He was arrested on suspicion of conspiracy to commit fraud, attempted fraud, and aiding and abetting other crimes, according to prosecutors. They added that he will remain in custody over fears that he is a flight risk and may tamper with evidence.

Police questioned the CardSystems chief and later arrested him on the basis of a warrant. Prosecutors said the head of Wirecard’s Dubai unit had travelled to Munich and turned himself in.

Wirecard filed for insolvency last month after disclosing a €1.9bn black hole in its finances that its auditors EY said was a result of a sophisticated fraud. The German payments processing firm has faced allegations that it had relied on obscure third-party acquiring partners for the majority of its reported revenue and profit.

The arrest of another Wirecard executive comes after prosecutors raided Wirecard’s offices in Germany and other properties in Austria as they widened their probe into the firm.

Read more: Head of German regulator calls Wirecard fraud a ‘massive criminal act’

Prosecutors are treating finance boss Alexander von Knoop and chief product officer Susanne Steidl as suspects, as well as Braun and chief operating officer Jan Marsalek, whose whereabouts are reportedly unknown.

Bellenhaus and Marsalek told KPMG, who conducted a special audit into the firm, about arrangements with third parties, according to documents seen by the Financial Times.

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