BERLIN: German prosecutors said 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.
Wirecard's chief executive Markus Braun was arrested on suspicion of falsifying accounts before being released on bail.
The company has since filed for bankruptcy.
Allegations had dogged Wirecard for months, but the financial technology company was able to repeatedly fend off claims. German authorities even launched investigations against a journalist over the negative reports.
But the scam unravelled in June when auditors Ernst & Young said they were unable to find 1.9 billion euros of cash in the company's accounts.
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