Wirecard probe finds German finance minister, auditors at fault | News | DW | 22.06.2021
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Wirecard probe finds German finance minister, auditors at fault

The final report of a parliamentary probe into the scandalous collapse of the German payment-processing company Wirecard has concluded that the Finance Ministry failed to detect fraud that cost investors millions.

A group of German lawmakers present a report on the Wirecard scandal

Members of the Wirecard parliamentary probe present their report to Bundestag President Wolfgang Schäuble

German Finance Minister Olaf Scholz is coming under fire after the Wirecard investigative committee presented its final report to Bundestag President Wolfgang Schäuble on Tuesday.

Lawmakers from opposition parties and Chancellor Angela Merkel's Union bloc criticized the role of Social Democrat Scholz in failing to prevent the scandal. 

Christian Democrat (CDU) lawmaker Matthias Hauer told reporters that Scholz and the Finance Ministry "looked the other way, did not act and made the investigation difficult." 

'Deep supervisory sleep'

"Olaf Scholz and the leadership of the Finance Ministry bear political responsibility for the Wirecard scandal,'' Hauer said, adding that Scholz "presented himself as a silent minister with implausible lapses of memory."

Hauer said the Finance Ministry should have intervened when Germany's financial regulator, BaFin, in 2019 issued a ban on short-selling Wirecard stock. The short sellers were reacting to reports that Wirecard was fraudulent, and were betting that its share price would eventually crash. 

BaFin and the Finance Ministry have "been in a deep supervisory sleep for years," Hauer said. 

Watch video 05:21

Wirecard: Was there ever a will to investigate?

German lawmakers also accused auditors Ernst & Young (EY) of numerous oversight failings and mishandling of the biggest fraud scandal in postwar Germany.

"EY could and should have noticed the accounting fraud,'' said Social Democrat lawmaker Cansel Kiziltepe, seeking to defend Scholz against criticism from the other parties.

What was the Wirecard scandal?

Wirecard was once the poster child for Germany's financial technology sector. Set up in 1999, it processed online payments for gambling and pornography sites. It eventually grew into a top financial services provider with huge growth potential that many people had been encouraged to invest in.

Even Merkel herself lobbied on behalf of the company during a trip to China in 2019. 

In June 2020, the company filed for insolvency after admitting that €1.9 billion ($2.3 billion) supposedly held in trust accounts didn't exist. It was also found to be massively in debt and faced accusations of having falsified balance sheets for years.

Wirecard's ex-chief executive Markus Braun is now being probed on suspicion of criminal fraud.

Interpol has issued a red notice for the company's former chief operating officer, Jan Marsalek, on allegations of  "violations of the German duty on securities act and the securities trading act, criminal breach of trust, especially serious case of fraud."

mvb/wmr (dpa, AP)

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