Finance

Wirecard executive pledges to help German prosecutors

A German man who had managed the Dubai subsidiary of the online payment company Wirecard has turned himself in and is set to cooperate with German prosecutors, his lawyer said on Friday.

“My client gave willingly gave himself up to the proceedings and stands by his individual responsibility, unlike others,” the lawyer said.

The manager, formerly the head of the now-defunct Cardsystems Middle East, traveled from the United Arab Emirates to Munich last week. The Dubai subsidiary is at the center of the massive financial scandal that saw Wirecard’s chief Markus Braun arrested on suspicion of fraud and market manipulation. German authorities are also investigating other high-ranking company leaders. The company filed for insolvency last month after admitting that roughly €1.9 billion ($2.1 billion) that appeared in its accounts likely never existed.

Markus Braun speaks at a Aschheim conference in April 2019 (picture-alliance/dpa/P. Kneffel)

Markus Braun was released on €5 million ($5.7 million) bail in June

German authorities have already interrogated the Dubai manager after he flew into his European homeland. On Friday, his lawyer said his client would discuss details of the case “exclusively with the Munich prosecutors.”

Company lashes out, then breaks down

Wirecard’s meteoric rise was abruptly halted after the Financial Times drew attention to apparent wrongdoings in January and February 2019. The UK-based newspaper accused company executives of shuffling cash between Asian subsidiaries to artificially inflate profits.

At the time, the German company decried the reports as “false, inaccurate, misleading and defamatory” as well as devoid of substance.

However, the reports triggered the company’s prolonged downfall, which culminated with its in-house auditors EY accusing it of an “elaborate and sophisticated fraud” last month.

Germany’s financial regulator BaFin also faces criticism for its response, which included a move to protect the company by banning investors from betting against it, as well as charges against people suspected of trying to bring the down the share price. The suspects reportedly included Financial Times journalists. Many accuse German authorities of dragging their feet when scrutinizing the online payment firm.

Scholz under fire

German lawmakers blasted Finance Minister Olaf Scholz on Friday after a report indicated that BaFin informed the Social Democratic politician of its probe into Wirecard in February 2019. Far-left deputy Bernd Riexinger urged Scholz to explain “why his ministry ignored” the early warnings. Lawmaker Matthias Hauer, a member of Angela Merkel’s Christian Democrats, called on the minister to “finally make this a main issue and not duck away.”

Read more: Germany to overhaul regulator after Wirecard scandal

The attacks on Scholz hit a sore spot for his party as the minister is eyeing a run for chancellor after Merkel steps down next year. SPD lawmaker Jens Zimmermann, who is tasked with overseeing the Wirecard scandal on behalf of his SPD colleagues, said he saw “no indications” that the scandal could be dangerous for the minister.

He said Scholz was informed about BaFin moving to ban short-selling Wirecard stock, meaning that the regulator was “reaching for a very sharp sword to avert market manipulation.”

“From that, it cannot be concluded that the minister omitted something,” Zimmerman told Reuters. “He had to assume that BaFin was handling it.”

dj/sms (AFP, Reuters, dpa)



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