Wirecard has collapsed owing creditors 3.5 billion euros ($A5.7 billion) after disclosing a gaping hole in its books in Germany's worst accounting scandal.
The implosion of the payments company came a week after auditor EY refused to sign off its 2019 accounts, forcing out chief executive Markus Braun and leading Wirecard to admit 1.9 billion euros of its cash probably did not exist.
Wirecard is the first member of Germany's DAX stock index to go bust, less than two years after it commanded a spot among the country's biggest 30 listed companies.
Its demise leaves creditors with scant hope of getting back the 3.5 billion euros they are owed, a source close to the matter said.
Of that amount, Wirecard has borrowed 1.75 billion euros from 15 banks and 500 million euros from bond investors.
"The money's gone," one banker said. "We may recoup a few euros in a couple of years but will write off the loan now."
The collapse of Wirecard, once one of the hottest financial technology companies in Europe, dwarfs other German corporate failures.
Drilling machines maker Flowtex inflicted losses of more than two billion euros in the 1990s while container firm P&R cost investors about three billion euros in 2018.
Wirecard shares, which were suspended ahead of the announcement, crashed 80 per cent when trading resumed. They have lost 97 per cent since auditor EY questioned its accounts last Thursday.
EY has audited Wirecard's accounts for more than a decade.
Wirecard said in a short statement its new management had decided to apply for insolvency at a Munich court "due to impending insolvency and over-indebtedness".
It said it was evaluating whether to file for insolvency for its subsidiaries.
The ascent of Wirecard, which was founded in 1999 and is based in a Munich suburb, was dogged by allegations from whistleblowers, reporters and speculators that its revenue and profits had been pumped up through fake transactions.
Braun fended off the critics for years before finally calling in outside auditor KPMG late last year to run an independent investigation.
The Munich prosecutor's office, which is already investigating Braun on suspicion of misrepresenting Wirecard's accounts and of market manipulation, said: "We will now look at all possible criminal offences."
Braun has been freed on bail of five million euros and remains a suspect. Former chief operating officer Jan Marsalek is also under suspicion and believed to be in the Philippines, according to justice officials there.