German prosecutors drop probe into FT over Wirecard
German prosecutors have dropped their investigation into journalists of the Financial Times in connection with its reporting on the corporate fraud at payments firm Wirecard that eventually led to its collapse.
The Munich public prosecutors office said it has
discontinued the proceedings as it has not found enough evidence to support the
case.
The prosecutors launched an investigation into a Financial
Times journalist in February 2019, prompting the newspaper to reject any
allegations against the newspaper or its journalists of market manipulation or
unethical reporting.
The FT said in a statement carried in its story of the
investigation being dropped: “We welcome this decision. The unfounded criminal
complaint should never have been made by (regulator) BaFin and should have been
dropped by Munich prosecutors far sooner. Our reporters acted courageously and
responsibly in the public interest throughout.”
Wirecard had filed charges against the newspaper on
suspicion of market manipulation, accusing them of cooperating with short
sellers to help them to profit from share price falls after the reports on the
company became public.
The prosecutors said on Thursday that the newspaper’s
reporting had been fundamentally correct and they had not established direct
contact with short sellers. They said the investigation would be continued
against the short sellers.
Wirecard’s demise has embarrassed Germany’s government,
which prides itself on a reputation for rectitude and reliability, amid
criticism that authorities ignored red flags.
Finance Minister Olaf Scholz, responsible for the financial
watchdog, told business newspaper Handelsblatt he was tightening rules on
securities transactions for BaFin employees.
Handelsblatt said BaFin employees had increased their
trading in Wirecard shares and share derivatives in the months before the
firm’s collapse.
“Even the mere appearance of conflicts of interest must be avoided,”
Scholz told Handelsblatt, referring to share trading.
“For this reason, the financial supervisory authority will
issue additional regulations for employee transactions,” he added. “In the
ministry, too, we will create stricter rules”.
On Tuesday, German lawmakers launched a parliamentary
inquiry into Wirecard’s collapse in an effort to force the government to reveal
more about a failure to avert the country’s biggest post-war corporate fraud.
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