German Finance Minister Knew of Wirecard Issues a Year Before Collapse

(Bloomberg) — German Finance Minister Olaf Scholz was aware of potential market manipulation at Wirecard AG almost a year and a half before the company collapsed, putting pressure on a key figure in Angela Merkel’s government.

Financial watchdog BaFin informed Scholz in February 2019 about the case “because of the suspicion of a violation against the prohibition of market manipulation,” according to a report by the Finance Ministry seen by Bloomberg.

His early knowledge of the allegations swirling around Wirecard increases scrutiny on the highest-ranking Social Democrat in Merkel’s coalition and lays bare the delicate political dynamics just over a year before the next election.

Presented to the heads of the parliamentary finance committee on Thursday evening, the report creates a new opening for critics who accuse German authorities of being too lax by failing to pursue fraud allegations of a company that aspired to be a leading light in

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German finance minister points to regulatory failures in Wirecard scandal

By Holger Hansen

BERLIN (Reuters) – German Finance Minister Olaf Scholz said lawmakers need to quickly determine how to tighten regulation in the wake of an accounting scandal at payments company Wirecard that has tarnished the reputation of Germany’s financial watchdog.

The Wirecard case “raises critical questions about supervision of the company, in particular with regards to accounting and balance sheet control,” Scholz told Reuters on Tuesday.

“It appears that neither auditors nor regulators were effective here,” he added.

The comments were an about-face from a brief statement he made on Monday, in which he said regulators had worked hard and done their job.

Wirecard had said on Monday that 1.9 billion euros ($2.15 billion) it had booked in its accounts likely never existed, a black hole that has led to the arrest of its chief executive and that threatens to engulf the company.

Scholz said that any mistakes made

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