Wirecard’s former CEO Markus Braun has been arrested as BaFin faces criticism for its “complete failure” to discover the irregularities earlier

Having resigned on Friday as Wirecard’s CEO, Markus Braun has now been arrested on charges of inflating the company’s balance sheet.

The prosecutors have accused him of having inflated the company’s total assets and sales volume through transactions from third parties to make the company appear in better shape than it was, thus fooling investors and customers.

The news comes after a week of turmoil for the beleaguered German FinTech unicorn. Last week it was revealed that Wirecard couldn’t account for €1.9bn ($2.1bn) of cash on its balance sheet. The missing money represented about of fourth of Wirecard’s balance sheet. The company later said that the money didn’t exist.

Prosecutors said that Braun had turned himself in on Monday evening after a warrant had been issued for his arrest, CNBC reported. Braun would be released as soon as he could pay €5m ($5.66m) in bail.

Two Philippine banks who were said to be holding the missing money have both denied that they have had any dealings with Wirecard, alleging that rogue employees falsified documents.

Wirecard’s shares have crashed by 80% since last Wednesday.

The scandal has also put the spotlight on German financial regulator BaFin, which is now facing criticism for how the scandal could’ve happened on its watch.

“It’s a complete disaster we’re looking at,” Felix Hufeld, president of German financial regulator BaFin, said on Monday on a panel discussion, Bloomberg reported. “It’s a shame that something like that happened.”

He added that it is starting to look like a “complete failure of a senior management, despite many, many hints to discover the facts.”

Hufeld continued, “It goes on to the scores of auditors who couldn’t dig up the truth and it goes on with a whole range of private and public entities including my own who have not been effective enough to prevent something like that happening.”

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