Germany makes new arrest in Wirecard collapse

BERLIN: German prosecutors said on Monday they have made a new arrest related to the spectacular collapse of payments provider Wirecard, which is shaping up to be the country’s biggest financial fraud scandal.

The managing director of Cardsystems Middle East FZ-LLC, a Dubai-based subsidiary of Wirecard, was placed under arrest on suspicion of serious fraud, said prosecutors. The suspect was not named by authorities, but German media have identified him as Oliver Bellenhaus, who ran the German company’s most profitable unit before the scandal was exposed.

Prosecutors said reasons for keeping the suspect in custody include "flight risk and risk of evidence suppression".

Wirecard shocked Germany’s financial world when it admitted last month that 1.9 billion euros missing from its accounts likely did not exist. German Finance Minister Olaf Scholz has called it an "unparalleled scandal", saying it underlined the need for greater oversight and over such financial firms.