Gerguy’s finance and economy ministers on Wednesday faced questions from lawmakers about the fraud scandal that brought down bills operator Wirecard amid a complaint that the government omitted the first warning signs.
Wirecard filed an insolvency claim last month after admitting that there are nine billion euros ($2.2 billion) in its accounts.
Former CEO Markus Braun was arrested on suspicion of falsting accounts and manipulating the market.
Wirecard’s revelations surprised Germany, making comparisons to Enron’s accounting scandal in his best friend two decades ago.
Markus Braun, former CEO of Wirecard, is in custody for falsting accounts and manipulating market position Photo: AFP / Christof STACHE
Gerguy’s Parliamentary Finance Committee held a special closed consultation in Berlin to consult Finance Minister Olaf Scholz and Economy Minister Peter Altmaier with the highest consultations likely to focus on the precise timing of Wirecard’s misconduct and whether there were regulatory violations of Apple.
The two ministers promised full transparency in a case that scholz called an “unprecedented scandal” and a blow to Germany’s economic reputation.
He promised to overtake Gerguy’s watchdog, Bafin, accusing critics of being too lax in his supervision of Wirecard, giving him stricter and more personal powers of intervention.
Finance committee member Hans Michelbach told reporters that it was not enough to announce reforms, “there will also be a responsibility.”
Finance committee chairwoman Katja Hessel of the pro-business FDP party warned that a parliamentary inquiry could well be announced if ministers’ responses are deemed insufficient.
Gerguy’s finance and economy ministers will be questioned Wednesday through lawmakers about the giant fraud that brought down Wirecard Photo: AFP/Christof STACHE
Wirecard’s downfall has increasingly become a political potato, after Finance Minischeck documents revealed that Scholz was destroyed in February 201 on suspicion of misconduct.
Even more shameful was the revelation of the anguish that Chancellor Angelos Angeles Merkel promoted Wirecard a vacation to China in September 2019, as the Apple of the Angelians raided the Chinese market.
Merkel was “unaware” of Wirecard’s irregularity time, her spokesman told reporters.
Finance Minister and Deputy Chancellor Olaf Scholz and Gerguy Econ will attend an assembly of Gerguy’s Parliamentary Finance Committee Photo: AFP / Tobias SCHWARZ
Founded in 1999, the Bavarian start-up Wirecard has gone from an apple that channels coins to pornographic and gambling sites to a respectful electronic payments company that pulled classic lender Commerzbank out of dax 30 in 2018.
It boasted a market position valuation of more than 23 billion euros ($26 billion) at one point, surpassing Deutsche Bank. Its load percentage has fallen by more than 98% since last year.
Wirecard’s problems began in January 201 with a chain of Financial Times articles alleging accounting irregularities in its Asian division, led by operecore leader Jan Marsalek.
Bafin responded by ruling an investigation into FT journalists.
Wirecard’s upheavals exploded in June when longtime Ernst and Young auditors said they could not locate 1 billion euros of coins intended to be accepted as true with accounts at two Philippine banks.
Wirecard then stated that the money, which accounts for a quarter of its balance sheet, “probably didn’t exist.”
The former CEO of the company, born in Austria, Braun, was arrested and released on bail.
EY said he fed himself through false statements and accused Wirecard of an “elaborate and sophisticated” fraud. But the audit organization itself has been criticized for approving Wirecard accounts for years.
The scandal intensified last week when Munich prosecutors arrested Braun and arrested two other former board members for large-scale “advertising fraud,” saying his investigations showed that the deception was in one position in 2015.
They also said there is evidence to advance that banks and other investors were defrauded to produce a budget of up to 3.2 billion euros for Wirecard.
These “most likely lost” sums, they added.
Braun, former economic leader Burkhard Ley and beyond chief of accounting Stephan von Erffa, the executive leader of a Dubai-based Wirecard subsidiary, is accused of inflating the company’s income and balances to hide years of loss.
Former chief operating officer Marsalek, also wanted through Gerguy’s authorities, is on the run.