Wirecard's Markus Braun: schmoozing the elite with tech twaddle

Markus Braun, the self-styled tech visionary behind failed German tech firm Wirecard, was adept at fooling the gullible. There were red flags from the start, says Jane Lewis.

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.

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. 

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”. 

Recommended

The charts that matter: bond yields turn back up and a new bitcoin record
Global Economy

The charts that matter: bond yields turn back up and a new bitcoin record

Bitcoin hit a new all-time high, while government bond yields turned back up. Here’s how that has affected the charts that matter most to the global e…
23 Oct 2021
Larry Fink: the undisputed king of Wall Street
People

Larry Fink: the undisputed king of Wall Street

Larry Fink survived two big financial crises and went on to build a massive asset manager, doing for investing what Henry Ford did for cars. He has hi…
23 Oct 2021
Cryptocurrency roundup: bitcoin hits a new record high
Bitcoin & crypto

Cryptocurrency roundup: bitcoin hits a new record high

In the week when bitcoin hit a new high, we look at what’s been going on in the world of cryptocurrencies this week.
22 Oct 2021
Green finance is set to be the most powerful financial repression tool yet
Bonds

Green finance is set to be the most powerful financial repression tool yet

The government has launched its “green savings bond” that offers investors just 0.65%. But that pitiful return is in many ways the point of “green” fi…
22 Oct 2021

Most Popular

How to invest as we move to a hydrogen economy
Energy

How to invest as we move to a hydrogen economy

The government has started to roll out its plans for switching us over from fossil fuels to hydrogen and renewable energy. Should investors buy in? St…
8 Oct 2021
How to invest in SMRs – the future of green energy
Energy

How to invest in SMRs – the future of green energy

The UK’s electricity supply needs to be more robust for days when the wind doesn’t blow. We need nuclear power, says Dominic Frisby. And the future of…
6 Oct 2021
The after effects of the gas-price shock
Economy

The after effects of the gas-price shock

In the wake of the recent spike in the natural gas price, we can expect slower growth, an industrial recession – and a newly assertive Russia, says Ma…
17 Oct 2021