German ministers face grilling over Wirecard collapse

Frankfurt am Main (AFP) – Germany’s finance and economy ministers will be grilled by lawmakers on Wednesday about the massive fraud scandal that brought down payments provider Wirecard, amid criticism that authorities failed to act on early warning signs.

Wirecard filed for insolvency last month after admitting that 1.9 billion euros ($2.2 billion) missing from its accounts did not exist.

Former CEO Markus Braun has been arrested on suspicion of falsifying accounts and market manipulation.

The Wirecard revelations have stunned Germany, drawing comparisons with the Enron accounting scandal in the United States almost two decades ago.

Germany’s parliamentary finance committee has asked Finance Minister Olaf Scholz and Economy Minister Peter Altmaier to attend a closed door special hearing to shed light on the saga from 1400 GMT.

Questions are likely to focus on when exactly government officials and regulators learned of accounting irregularities at Wirecard, and if there were any

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Former Wirecard CEO Markus Braun was arrested for a 2nd time in relation to the company’s $2 billion accounting scandal

2020 07 09T000000Z_470162734_RC2LPH9XW46N_RTRMADP_3_WIRECARD ACCOUNTS COLLAPSE.JPG
2020 07 09T000000Z_470162734_RC2LPH9XW46N_RTRMADP_3_WIRECARD ACCOUNTS COLLAPSE.JPG

Reuters

  • Wirecard’s former chief executive Markus Braun has been rearrested in Munich as German prosecutors dug deeper into allegations of fraud at the fintech firm.

  • Two other executives — revealed by the Financial Times as Wirecard’s former finance boss, Burkhard Ley, and Stephan von Erffa, ex-head of accounting — were also arrested.

  • Former chief operating officer, Jan Marsalek, has likely escaped to Russia with the “clear help of Russian intelligence,” two officials told Business Insider. 

  • Wirecard filed for insolvency a month ago soon after revealing an amount of 1.9 billion euros ($2 billion) was missing from its balance sheet, and likely never existed.

  • Visit Business Insider’s homepage for more stories.

Former Wirecard CEO Markus Braun has been arrested for the second time as German prosecutors probed further into a fraud investigation surrounding the company’s reputedly inflated balance sheet.

Two other executives — named

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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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