German MPs to grill ex- Wirecard boss over massive fraud
[FRANKFURT] Markus Braun, the former chief executive of disgraced payments giant Wirecard , will on Thursday face a public grilling by German lawmakers over the massive accounting fraud that brought down his firm. Read more at The Business Times.
Tell us what you think. Email us email@example.comThe Wirecard implosion, which has drawn comparisons with the Enron accounting scandal in the US in the early 2000s, has been described as"unparalleled" in Germany by Finance Minister Olaf Scholz.
The fallout has prompted Mr Scholz to announce plans to overhaul finance watchdog Bafin, accused of lax oversight of Wirecard, and introduce stricter rules for auditing firms.But Mr Scholz has himself faced scrutiny from MPs eager to know when exactly government officials learned of the Wirecard suspicions and whether the authorities failed to act on early warning signs.
Even Chancellor Angela Merkel has been embarrassed by the scandal, after it emerged that she promoted Wirecard on a trip to China in September 2019, when the firm was eyeing a foray into the Chinese market - and when journalists were already raising questions about its books. headtopics.com
FALL FROM GRACEFounded in 1999, Bavarian startup Wirecard rose from a company piping cash to porn and gambling sites to a respectable electronic payments provider that edged traditional lender Commerzbank out of the bluechip DAX 30 index in 2018.A rising star in the fintech sector, Wirecard boasted a market valuation of more than 23 billion euros at one point - outweighing giant Deutsche Bank.
The fraud revelations later sent Wirecard's share price tanking by 99 per cent and it was booted off the DAX last August.Clouds started to gather in early 2019 with a series of Financial Times (FT) articles alleging accounting irregularities in its Asian division, headed by COO Marsalek.
In a much-criticised move, Bafin responded by announcing a probe into FT journalists.The Wirecard scam unravelled in June when long-time auditors Ernst & Young said they were unable to find 1.9 billion euros of cash meant to be sitting in trustee accounts at two Philippine banks, forcing Wirecard to admit the money did not exist.
The company filed for insolvency and Braun resigned.VANISHING ACTBraun was arrested days later and initially released on a five million euro bail.But he was re-arrested in July after Munich prosecutors widened their investigation against him and other top Wirecard executives. headtopics.com
They stand accused of inflating revenues and profits to hide years of losses and con investors into providing funds of up to 3.2 billion euros to Wirecard, money that is likely lost forever.According to Munich prosecutors, the trickery started as far back as 2015.
Braun, former accounting head Stephan Freiherr von Erffa and Oliver Bellenhaus, the managing director of a Dubai-based Wirecard subsidiary, are all in custody in Germany.All three will be quizzed as witnesses in the parliamentary inquiry, along with several other ex-employees.
Wirecard's former finance chief Burkhard Ley was released on bail earlier this month.The fugitive Marsalek meanwhile is never far from the headlines, with a steady stream of media revelations about his colourful lifestyle and reported connections to Austrian and Russian intelligence services adding another layer of intrigue to the Wirecard saga.
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