Munich prosecutors have arrested a Wirecard executive who ran the unit at the heart of the company’s alleged fraud from his apartment in Dubai’s Burj Khalifa.
Oliver Bellenhaus, a 46-year-old sports car enthusiast, was arrested on suspicion of aggravated fraud. He will remain in police custody over fears that he is a flight risk and may tamper with evidence, prosecutors said in a statement on Monday.
He is the second senior Wirecard employee to be arrested after the former chief executive Markus Braun, who was later released on bail. Prosecutors have said they are investigating a number of additional suspects who cannot be named “for tactical reasons”. The whereabouts of Wirecard’s former second-in-command Jan Marsalek are unknown.
The FT earlier reported that Mr Bellenhaus, who ran Wirecard’s CardSystems Middle East, largely from his apartment in the world’s tallest building, had left Dubai and was staying at a five-star Munich hotel.
Wirecard for years told its longstanding auditor EY that CardSystems operated a lucrative business outsourcing payments processing to external partners.
Mr Bellenhaus and the group’s vanished chief operating officer Mr Marsalek briefed KPMG this year about the arrangements with third parties during a special audit by the accounting firm, according to documents seen by the Financial Times.
It was exposed as a sham last month precipitating Wirecard filing for insolvency. Wirecard admitted that €1.9bn of cash on its balance sheet, including €1.1bn said to be in two accounts in the name of CardSystems, probably did not exist and that it had previously misrepresented the third-party business.
Mr Bellenhaus had travelled to Germany over the weekend and stayed at the five-star Andaz Munich Schwabinger Tor on Sunday. He did not return a message left for him at the hotel. The Financial Times could not immediately contact a lawyer for Mr Bellenhaus.
On Monday morning, Mr Bellenhaus was interrogated by Munich prosecutors for several hours and then placed into police custody, the law enforcement authorities said in a statement.
Munich prosecutors are leading a criminal investigation into Wirecard, which is based in the suburbs of the city. Mr Braun, who was arrested and released on €5m bail, has denied wrongdoing. He has previously declined requests to comment on his role at Wirecard and one of the partner companies — Al Alam Solutions in Dubai — central to the alleged fraud.
In October last year, the FT published documents provided by whistleblowers which indicated that the business between Wirecard and Al Alam was invented. The FT also reported that Mr Bellenhaus appeared to be involved in the running of Al Alam. At the time, Wirecard denied any wrongdoing by its staff.
The collapse of Wirecard, a member of the prestigious Dax 30 index with a valuation of more than €24bn two years ago and widely regarded as Germany’s most promising modern technology company, has prompted a crisis for institutions supervising the group.
CardSystems was the largest individual unit within the Wirecard group, purportedly contributing a quarter of its worldwide revenue and about 40 per cent of profits in recent years, according to documents seen by the FT, but its financial statements were not prepared by a local audit firm. Instead they were overseen as part of the overall group audit by EY in Germany.
Wirtschaftswoche, a German business weekly, has reported that at one stage the small and normally quiet Al Alam office in Dubai was filled with unfamiliar staff, coinciding with a visit by EY auditors from Germany.
Mr Bellenhaus is still listed as a director of Wirecard Card Solutions UK Ltd, responsible for supporting the prepaid card operations of several UK fintech companies, a role he has held since 2012. The Financial Conduct Authority recently froze Wirecard’s UK operations for three days, temporarily preventing customers of companies such as Curve, Pockit and Payoneer from accessing their money.
CardSystems and Al Alam were both placed into liquidation in May. At the time, Wirecard said the Al Alam liquidation was a result of “the damage to its reputation caused by its integrity being publicly called into question”, and that the measures would have no impact on its business. The liquidation of CardSystems was “intended to reduce the complexity within the group and increase its efficiency”, Wirecard said at the time.