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Payment the company got into an accounting scandal after he admitted that $2 billion on its accounts probably don’t exist.

Liz Alderman and Christopher F. Shuette

The former chief executive of Wirecard, a German electronic payment platform, has been arrested in Munich, prosecutors said Tuesday, after the company admitted that 1.9 billion euros ($2.1 billion) missing from its accounts probably “do not exist.”

Markus Braun, who resigned as chief executive on Friday, traveled from his home in Vienna to Germany late Monday and turned himself into the authorities. Earlier on Monday, the Munich state attorney had filed a petition for an arrest warrant on suspicion of market manipulation.

Mr. Braun, 50, built Wirecard from a small Bavarian start-up into a darling of the financial technology sector; it grew so dominant that it knocked Germany’s Commerzbank out of the DAX stock market index in 2018. But its shares have tumbled over 80 percent in recent days after the company’s board disclosed that its auditors, EY, formerly Ernst & Young, couldn’t locate accounts containing nearly €2 billion and postponed its annual report.

The German prosecutors accused Mr. Braun of misrepresenting Wirecard’s earnings by inflating its sales with falsified income by using so-called third-party acquirers, which provide payment-related services.

Later on Tuesday a court released Mr. Braun on €5 million bail, and on condition that he show up in Munich once a week to check in with the authorities.

Two Philippine banks that reportedly had held that money in escrow accounts last week revealed that they had never dealt with Wirecard. One of them, Bank of the Philippine Islands, issued a statement saying claims that the company was a client were “spurious.”

Another Bank, BDO Unibank, showed last week that the document, claiming Wirecard held an account at a financial institution have been doctored and is a fake of the signature of Bank employees.

Mr. Braun was replaced a chief executive by James Freis, a former compliance officer at Germany’s stock exchange who was hired only the day before to serve on Wirecard’s management board.

Mr. Braun has not been formally charged with a crime, but he may be kept in jail for up to six months pending charges, according to the Munich prosecutor’s office.

His downfall as a combative executive hailed in the German corporate world was precipitated by a series of reports in The Financial Times over the last year questioning accounting irregularities in the company’s Asian operations. Wirecard disputed the reports, calling them “fake news” and claiming it was under attack by speculators.

An Austrian businessman and computer science expert, Mr. Braun, who lives in Vienna, joined the Munich-based company two years after it was founded in 1999 and led Wirecard for nearly two decades. He previously worked for KPMG’s consulting business.

Mr. Braun methodically built Wirecard into an apparently profitable international business, initially offering its digital payment services to pornography and gambling sites, which other online payments platforms tended to shun.

Over the years, the company prospered by making contactless payments seem effortless; it attracted hundreds of thousands of new merchants, including high-profit customers like Apple Pay, Google Pay and Visa.

In 2016, it ventured into North America by acquiring Citibank’s prepaid card division for an undisclosed sum.

Mr. Braun was virtually unknown until the company won a spot in Frankfurt’s blue-chip stock index, the DAX, causing a sensation in Germany. In a 2018 article in the German newspaper Zeit, Mr. Braun, who recently began wearing black turtleneck sweaters like Steve Jobs, was described as being sober, coldly analytical and highly private.

“I have no interest in being a celebrity,” he told Zeit, describing his own personality as “quite boring.”

Nonetheless, Mr. Braun became a regular speaker at technology and payment conferences, where he promoted the benefits of a cashless society and predicted that the world’s retail payment infrastructure would replaced by a single, fully digital system within a decade.

When the reports emerged of suspected wrongdoing at Wirecard, Mr. Braun and his team responded by delaying EY’s annual report for 2019 and hiring KPMG to provide an independent assessment of the company’s books.

In its report, released in April, KPMG said it could not provide sufficient documentation to address all allegations of irregularities.

In the most serious finding, covering 2016-18, KPMG said it had been unable to verify the existence of €1 billion in revenue that Wirecard booked through three obscure third-party acquiring partners. The findings led to calls by some investors for Mr. Braun’s ouster.

The KPMG report then attracted the attention of Germany’s financial regulator, BaFin, which had previously suspected short-sellers of manipulating Wirecard’s stock price.

On June 5, prosecutors raided the company’s headquarters and opened proceedings against management as part of the inquiry initiated by BaFin. Prosecutors said in a statement that the company was suspected of releasing misleading information that may have affected Wirecard’s share price.

After the raid, Wirecard said it would cooperate with the investigation. “The board is optimistic that this matter will be resolved and that the accusations will be shown not to be founded,” it said in a statement.

German financial regulators this week admitted making mistakes in their oversight of the company.

The situation is a “total disaster,” Felix Hufeld, the president of BaFin, said Monday, adding that his agency and others should have had tougher oversight.

“It is a scandal that something like this could happen,” Mr. Hufeld said.

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