German ministers grilled over Wirecard
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 regulatory failings.
Both ministers have vowed full transparency in a case that
Scholz has called "an unparalleled scandal" and a blow to Germany's
finance reputation.
He has vowed to reform German finance watchdog Bafin,
accused by critics of having been too lax on Wirecard, by giving it greater
powers to intervene and launch investigations.
Bafin is "a toothless tiger" when it comes to
overseeing large firms, MP Frank Schaeffler of the pro-business FDP party, and
a member of the finance committee, told the Handelsblatt daily.
But Wirecard's downfall has increasingly become a political
hot potato as well, after finance ministry documents showed Scholz was told as
early as February 2019 of misconduct suspicions.
Even more embarrassing was the revelation that Chancellor
Angela Merkel promoted Wirecard on a trip to China in September 2019, when the
firm was eyeing a foray into the Chinese market.
Merkel had "no knowledge" of the Wirecard
irregularities at that time, her spokeswoman told reporters.
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