German regulators were 'deficient' in supervising Wirecard, says EU watchdog
German regulators were “deficient” in how they supervised payments company Wirecard and were at risk of being overly influenced by the Finance Ministry, the European Union’s markets watchdog said on Tuesday.
Wirecard’s former Chief Executive Markus Braun and other
executives have been held on suspicion of running a criminal racket that
defrauded creditors of 3.2 billion euros ($3.73 billion) in Germany’s biggest
post-war corporate fraud.
Those accused, including Braun, deny any wrongdoing.
The European Securities and Markets Authority (ESMA) began a
fast-track review in July into how Germany’s markets regulator BaFin and the
country’s accounting watchdog the Financial Reporting Enforcement Panel (FREP)
enforced EU transparency rules governing company information for markets and
investors.
ESMA said in its 190-page review that it found a number of
deficiencies, inefficiencies and legal and procedural impediments relating to
BaFin’s independence from issuers and the Finance Ministry.
“For BaFin ... there is a heightened risk of influence by
the Ministry of Finance given the frequency and detail of reporting to the MoF
in the Wirecard case, in some cases before actions were taken,” the ESMA report
said.
ESMA was asked by the European Commission to undertake the
review, whose findings the EU executive will use to determine if there is a
need for more centralised EU supervision of markets to stop such scandals from
happening again.
“The Wirecard case has once again highlighted that
high-quality financial reporting is essential for maintaining investor trust in
capital markets, and the need to have consistent and effective enforcement of
that reporting across the European Union,” ESMA Chair Steven Maijoor said in a
statement.
Comments
Post a Comment