EU Watchdog Slams Germany for Lapses in Wirecard Fraud | Investing News

By Huw Jones and John O’Donnell

LONDON/FRANKFURT (Reuters) – Germany failed to do enough to avert the Wirecard fraud, the European Union’s markets watchdog said on Tuesday as it delivered a highly critical verdict on the country’s handling of its biggest post-war corporate scam.

Wirecard’s former Chief Executive Markus Braun and other executives have been held on suspicion of running a criminal racket that defrauded creditors of 3.2 billion euros ($3.73 billion).

Those accused, including Braun, deny any wrongdoing.

The European Securities and Markets Authority (ESMA) began a fast-track review in July into how Germany’s markets regulator BaFin and the country’s accounting watchdog the Financial Reporting Enforcement Panel (FREP) enforced EU transparency rules governing company information for markets and investors.

ESMA said in a rare 190-page rebuke of another regulator that it found a number of deficiencies, inefficiencies and legal and procedural impediments relating to BaFin’s independence from issuers and

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Germany to overhaul accounting regulation after Wirecard scandal

Markus Braun, former chief executive of Wirecard - Michael Daider /Reuters
Markus Braun, former chief executive of Wirecard – Michael Daider /Reuters

Germany’s accounting watchdog is set to be stripped of its powers in the wake of the Wirecard scandal. 

The government will end its contract with the Financial Reporting Enforcement Panel (FREP) as soon as Monday, according to reports.

The job of overseeing company accounts will be taken on by Bafin, Germany’s financial regulator. 

“We have reached an agreement with the Finance Ministry to terminate the contract,” a Justice Ministry official told the Bild am Sonntag newspaper

Germany has been rocked by the collapse of payments company Wirecard, which filed for insolvency last week after admitting that €1.9bn (£1.7bn)  of cash on its balance sheet probably didn’t exist

Markus Braun, chief executive of the Dax-listed company, resigned on June 19 and was then arrested on suspicion of accounting fraud and market manipulation. 

German authorities are facing questions over

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