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The Wirecard scandal is increasingly moving towards a
political affair.
The Munich public prosecutor issued three arrest warrants against former
managers in the Wirecard case. There is even talk of "gang fraud" in what may be
the largest fraud case in post-war history.
The scam scandal at the Dax group Wirecard has reached a new dimension: The
Munich public prosecutor's office has meanwhile assumed "commercial gang fraud"
since 2015, as the investigative authority said, more than three billion euros
could be lost. Former CEO Markus Braun was put into custody for the second time
within a month - and unlike at the end of June, he was no longer released on
bail. This was announced by the Munich public prosecutor on Wednesday.
You can see the statement of the public prosecutor in the video above or here.
The former CFO Burkhard Ley and the former head of accounting are now also
behind arrest warrants. Meanwhile, the federal government is still under
political pressure because Chancellor Angela Merkel (CDU) advertised the Beijing
leadership in 2019 for the planned market entry of the group in the People's
Republic of China.
Wirecard could become the biggest fraud case in post-war history
The prosecutor's allegations amount to the fact that the Dax group may have been
led by a criminal gang since 2015 - a process not yet seen in the history of the
German stock market league. "Deceived by the wrong financial statements, banks
in Germany and Japan, as well as other investors, provided funds amounting to
around EUR 3.2 billion that were most likely lost due to the bankruptcy of
Wirecard AG," the investigators said.
If this is confirmed, Wirecard could become the largest fraud case in German
post-war history. The previous leader is the Baden-based company Flowtex, which
caused damage of over two billion euros in the 1990s by selling non-existent
special drilling machines. "We are also wondering how such a system could be
established," said Chief Prosecutor Anne Leiding, spokeswoman for the
investigative authority.
Testimony: Ex-CEO Braun the head?
According to witness statements, ex-CEO Braun was possibly the head: During
their interrogations, witnesses spoke of "corps spirit" and a "strictly
hierarchical system" under the chairman of the board, Leiding reported.
The Wirecard, based in the Munich suburb of Aschheim, had admitted before its
bankruptcy application that 1.9 billion euros could not be found, which should
be booked in Filipino trust accounts.
"In reality, the accused had known at the latest since the end of 2015 that the
Wirecard Group had overall losses in actual business," the investigators wrote
in their message. This also means that Wirecard should never have moved into the
Dax. At times, the company was worth more than 20 billion euros on the Frankfurt
Stock Exchange - apparently based on inventions.
"The very intensive investigations by the Munich I public prosecutor's office
have shown that the facts charged with the accused must be expanded considerably
once again," said Attorney General Anne Leiding, spokeswoman for the authority.
"We have very comprehensive statements from a leniency." Accordingly, the
accused managers should have decided in 2015 to "inflate" the Wirecard balance
sheet by pretending income - that is, to report non-existent bogus sales and
profits.
Former sales director Marsalek still on the run
As far as is known, the Wirecard board of directors forged deals with
subcontractors in Dubai and Southeast Asia who allegedly processed credit card
payments for the German company in Southeast Asia and the Middle East. The
former head of the Wirecard subsidiary in Dubai, Cardsystems Middle East, was
already in pre-trial detention.
According to the balance sheet of the parent company Wirecard AG 2018, this
company contributed a large share of the profits to 237 million euros - profits
that did not exist. The investigators did not reveal who the key witness was,
but the former Cardsystems managing director had agreed to cooperate. Former
sales director Jan Marsalek, like Braun, is still on the run as an Austrian
citizen.
For ex-CEO Braun, the recent arrest was probably surprising: the investigators
arrested him on Wednesday morning when he reported to the police as planned. All
three would not have turned themselves in, reported Leiding
The scandal is also becoming increasingly uncomfortable for the federal
government. Chancellor Merkel campaigned for Wirecard in China in 2019, when
Bafin financial regulators had long been aware of the allegations against the
company. The ex-secret service coordinator of the government headquarters also
acted as an advocate for Wirecard. A Bundestag investigation committee is
getting closer. A dispute over responsibilities has broken out within the
coalition.
Chancellery asks for information
The Federal Chancellery confirmed that there have been multiple contacts with
Wirecard managers and consultants since the end of 2018. Among other things, the
ex-State Secretary Klaus-Dieter Fritsche, responsible for the secret services
from 2014 to spring 2018, contacted the Chancellery and asked for an appointment
for Wirecard AG. In preparation, the Chancellery asked the Ministry of Finance
for information about the company. The finance department then sent "publicly
available information" to the Chancellery, including government responses to
opposition inquiries about allegations against Wirecard, such as accounting
irregularities.
On her trip to China in September 2019, Merkel spoke to the Beijing management
about the planned takeover of the Chinese company AllScore Financial by
Wirecard. At the time of the trip, Merkel "had no knowledge of possible serious
irregularities at Wirecard," said the spokesman. It is common practice for top
German politicians, including the Chancellor, to promote German companies abroad |
