In April this year, after KPMG delivered a highly critical report of Wirecard’s accounting, Markus Braun “visibly glowered with barely contained rage” at a recorded company town-hall meeting, says the Financial Times. It was “a rare show of emotion” from the self-styled “tech visionary” behind the German payments processing firm. Braun’s arrest last week, following the uncovering of a vast fraud, “is a brutal fall from grace for a once-fêted executive”, says The Economist. After taking the helm in 2002, the former KPMG management consultant transformed the start-up into a pioneer of digital payments – eventually persuading everyone from Germany’s financial establishment to Silicon Valley (by way of SoftBank’s boss, Masayoshi Son, who invested €900m last year) to believe in his company’s “amazing growth story”.
Wirecard: not an Amazon, but an Enron
We now know, says The Times, that Wirecard “was not the Amazon of digital payments” that Braun claimed, but rather “another Enron”. But how did he pull the wool over so many people’s eyes? Blame it on the blarney, says The Wall Street Journal. Braun was an instantly recognisable fixture at tech conferences – “recently adopting Steve Jobs-style black turtlenecks” for good measure – and he was Wirecard’s “most passionate advocate, as well as its largest shareholder”. According to one employee, he and Wirecard’s chief operating officer, Jan Marsalek, made “a formidable double act”. While Braun, “the storyteller”, smoothed investors, “Jan went around the world doing deals”.
Braun was born in Vienna in 1969 and studied computer science at the city’s Technical University, before beginning his career as a consultant at Contrast Management Consulting. In 1998, he joined KPMG in Munich – combining his work duties with a PhD in social and economic sciences. In 2002 he joined the board of Wirecard, a firm founded in a Munich suburb in the later part of the dotcom boom. After merging it with a local rival, Braun took Wirecard public in 2002 by taking over the Frankfurt listing of a defunct call-centre group – avoiding the scrutiny of an initial public offering.
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From the start, Braun came across as “aloof and mysterious” to staff. Long-standing employees recall an awkward Christmas party in 2009 – when Wirecard was gearing up for international expansion – remarkable for the fact that Braun “actually spoke to them”. More usually, Braun “secluded” himself on a floor reserved for senior management, taking a lift directly to his car, whose chauffeur whisked him between home and work. Braun continued to spend weekends in Vienna, mixing in political circles and contributing to the 2017 election campaign of Sebastian Kurz.
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A talent for gobbledegook
Some thought it strange that, even as Wirecard snapped up global businesses, Braun “rarely travelled to see them”. To critics, it was an early red flag. Braun was reportedly obsessed with Wirecard’s share performance – constantly checking the price on his mobile – but didn’t seem interested in the nuts and bolts of the business. When analyst Toby Clothier of Mirabaud Securities started studying Braun’s speeches, “the thing we found odd was his obsession with certain words”, he told the FT: “strong”, “machine-learning” and “ecosystem” all ranked highly. It fooled the gullible, but “it was gobbledegook”.
