German finance minister, auditors faulted in Wirecard probe
BERLIN — German lawmakers presenting a report Tuesday into the collapse of the payment processing company Wirecard accused the country's finance minister and auditors Ernst & Young of numerous oversight failings.
Wirecard filed for protection from creditors through insolvency
proceedings last year after admitting that 1.9 billion euros ($2.3 billion)
supposedly held in trust accounts in the Philippines probably didn’t exist.
The company’s former chief executive, Markus Braun, is being
investigated on suspicion of criminal fraud. Interpol has issued a red notice
for Wirecard’s former chief operating officer, Jan Marsalek, on allegations of
“violations of the German duty on securities act and the securities trading
act, criminal breach of trust (and) especially serious case of fraud.”
The nine-month parliamentary probe that concluded this week
immediately weighed upon Germany's upcoming election, with both opposition
parties and Chancellor Angela Merkel's Union bloc heavily criticizing the role
played by Finance Minister Olaf Scholz in the affair. Scholz is the center-left
Social Democrats' candidate to replace Merkel in the Sept. 26 vote.
“Finance Minister Olaf Scholz and the leadership of the
Finance Ministry bear political responsibility for the Wirecard scandal,” Union
bloc lawmaker Matthias Hauer told reporters. “Mr. Scholz presented himself as a
silent minister with implausible lapses of memory.”
He said the Finance Ministry should have stepped in when the
country's financial regulator in 2019 issued a ban on short-selling Wirecard
stock. The ban gave credence to Wirecard's claim that its stock was being
manipulated at a time when media reports, particularly by Britain's Financial
Times, indicated the company was cooking the books.
In their 4,500-page report, lawmakers also heavily
criticized the auditing company Ernst & Young, also known as EY, for
repeatedly approving Wirecard's annual accounts.
Questions have also been raised about political lobbying for
Wirecard by Merkel during a 2019 visit to China. Germany's longtime leader, who
isn't running for a fifth term, testified before the parliamentary
investigations committee that the payments company received no special
treatment.
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