Ex-Wirecard CEO goes on trial over ‘unparalleled’ fraud

Austrian-born Braun and two different former Wirecard executives will seem within the dock from Thursday on costs of business gang fraud, breach of belief, market manipulation and accounting manipulation.


The Munich district court docket has scheduled 100 court docket dates for the mammoth trial.

Wirecard, as soon as hailed as a standard-bearer for the German tech trade, imploded spectacularly in 2020 after admitting that 1.9 billon euros lacking from its accounts most likely didn’t exist.

Chancellor Olaf Scholz, who was finance minister on the time, described the scandal as “unparalleled” in post-war Germany.

Braun, who has been in custody for over two years, denies any wrongdoing.

The 53-year-old has pointed the finger at Wirecard’s fugitive former chiefoperating officer, Jan Marsalek, a shadowy determine with alleged ties to overseas intelligence companies.

READ ALSO: 5 issues to find out about Germany’s Wirecard scandal

Marsalek was reported earlier this 12 months to be hiding out in Russia.

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A senior Wirecard worker, nevertheless, instructed a German parliamentary inquiry final 12 months that nothing occurred at Wirecard with out Braun’s information.

“The group was formed by Markus Braun, and so was the company tradition. He determined the whole lot, he dictated the whole lot,” Rainer Wexeler instructed lawmakers.

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‘Incorrect’ accounts

On trial alongside Braun are Oliver Bellenhaus, the previous head of Wirecard’s Dubai subsidiary, and ex-accounting boss Stephan von Erffa.

They face a number of years in jail if convicted.

Bellenhaus has admitted wrongdoing and can function a key witness for the prosecution.

It took German investigators greater than 20 months to unravel the advanced net of fraudulent transactions implicating Wirecard subsidiaries and third-party firms throughout the globe.

Prosecutors say the accused offered “incorrect” monetary outcomes from 2015 to 2018, by together with fabricated revenues and earnings from companion firms in Dubai, the Philippines and Singapore, and utilizing cast paperwork to make Wirecard seem extra profitable than it was.

Among the many victims of the fraud have been banks that had offered credit score of 1.7 billion euros to Wirecard. Bonds price 1.4 billion euros have been additionally issued and are unlikely to be repaid.

Fall from grace

Based in 1999, the Bavarian start-up Wirecard began out processing funds for porn and playing websites and grew into a good digital funds supplier that edged conventional lender Commerzbank out of the
blue-chip DAX index.

Rumours about attainable dishonest at Wirecard surfaced every now and then over time, together with from shortsellers doing analysis on firms they suspected could be overvalued.

However Wirecard’s issues started in earnest with a sequence of Monetary Instances articles in 2019 alleging irregularities in its Asian division, primarily based on revelations from former workers and leaked paperwork.

The corporate was initially capable of fend off the claims, with the FT’s journalists themselves coming beneath investigation from German regulators.

READ ALSO: How Germany is planning to stop one other Wirecard scandal

However the rip-off lastly unravelled in June 2020 when long-time auditor EY saidit had found a 1.9-billion-euro gap in Wirecard’s accounts.

The sum, which made up 1 / 4 of the stability sheet, was meant to be sitting in trustee accounts at two Filippino banks.

However the Philippines’ central financial institution has stated the money by no means entered its financial system and each Asian banks, BDO and BPI, denied having a relationship with Wirecard.

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Regulatory overhaul

Wirecard filed for insolvency quickly after, changing into the primary DAX firm to fail.

Wirecard’s dramatic downfall despatched shockwaves by way of Germany and prompted an overhaul of the nation’s finance watchdog Bafin, closely criticised for ignoring early warning indicators about Wirecard.

The fallout additionally embarrassed Germany’s political institution, with former chancellor Angela Merkel coming beneath fireplace for selling Wirecard throughout a 2019 journey to China — when journalists have been already elevating doubts concerning the firm.

In a grilling final 12 months by lawmakers, Merkel stated there was “no motive at the moment” to consider there have been “critical irregularities at Wirecard”.

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