German finance minister denies responsibility for Wirecard scandal
Germany's finance minister on Thursday denied responsibility for the collapse of payments firm Wirecard in a parliamentary inquiry that will also put Chancellor Angela Merkel in the hot seat.
Once a rising star in the booming fintech sector, Wirecard
filed for bankruptcy last year after admitting that 1.9 billion euros ($2.3
billion) was missing from its accounts.
The company's former chief executive Markus Braun and
several other top executives were arrested on fraud and money-laundering
charges.
Lawmakers are investigating the political and regulatory
failings that allowed the Wirecard cheating to go unnoticed for years, with
critics saying early warning signs were ignored.
"The government does not bear responsibility for this
large-scale criminal fraud," Finance Minister Olaf Scholz told lawmakers
investigating the case which he described as the "biggest accounting fraud
scandal" in the history of post-war Germany.
Asked if he bore personal responsibility, Scholz also
emphatically replied: "No."
The finance minister admitted however that official
regulators were "not prepared enough" for the scandal and pledged to
"rebuild trust" in Germany as a financial centre.
The focus on politicians' roles in the drama comes at an
awkward time for Merkel's ruling conservatives and their Social Democratic
(SPD) coalition partners, five months before a general election.
Merkel in China
Merkel will be quizzed Friday over her role in the scandal
after it emerged she promoted Wirecard on a trip to China in September 2019
when the firm was eyeing a foray into the Chinese market.
Her intervention has raised eyebrows because journalists
were already voicing doubts about Wirecard's books at the time.
Merkel should ask herself whether "promoting Wirecard
was really appropriate or whether her office should not have looked into the
warning signs earlier," said Frank Schaeffler, an MP from the pro-business
FDP party who is on the committee.
Yet Scholz, who also took part in the China visit, denied
that the company had been a major topic on the trip.
"Wirecard was not discussed in any of my conversations
in Beijing," he told the committee.
The finance minister, a would-be Merkel successor for the
centre-left SPD, has also been accused of reacting too slowly.
Up before lawmakers on Wednesday, state secretary Joerg
Kukies had insisted that Wirecard at no point benefited from special treatment
from the ministry, which oversees banking regulator Bafin.
Bafin has been criticised for its lax oversight of Wirecard,
and notably filed a complaint against two Financial Times journalists who
reported about irregularities at the company.
The regulator has in recent months undergone sweeping
reforms and a reshuffle at the top, including the dismissal of former chief
Felix Hufeld in January.
The reform of the Bafin was part of "our important task
to rebuild trust in Germany as a financial centre," said Scholz.
- 'Criminal behaviour' -
With the election battle in full swing, SPD and opposition
MPs have sought to shift the spotlight onto the conservative-run economy
ministry by highlighting the role of Wirecard auditors.
As Wirecard's auditor for more than 10 years, accountancy
giant EY signed off on the firm's accounts even as a string of media reports
raised alarm about Wirecard's accounting practices.
As they grilled Economy Minister Altmaier on Tuesday,
lawmakers questioned whether the ministry's auditing watchdog APAS should have
scrutinised EY's work more closely.
Though he denied responsibility for the scandal, Altmaier
told the committee that compliance rules at APAS would be tightened.
In a report in March, lawmakers on the committee denounced
what they called "a culture of non-responsibility" and said that
financial authorities and political leaders had "well-founded indications
of criminal behaviour at Wirecard".
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