After the billion-euro crash of the dax company wirecard, which was allegedly caused by criminal activities, the federal government is coming under pressure from brussels. The EU commission calls in the european financial supervisory authority ESMA.
Supervisors to scrutinize collapse of munich-based payment service provider and possible oversight by regulators. Until 15. July is supposed to be a preliminary investigation report. This is revealed in a letter from the commission to the ESMA, which was made available to the german press agency on friday.
The federal government is alarmed – and wants to check whether there was a lack of supervision: "this is a worrying case," said government spokesman steffen seibert in berlin. "And of course the aim must be to prevent damage to germany’s financial center as a whole.". That is why weaknesses in control mechanisms, "where they are found, also had to be remedied." The federal supervisory authority for wirecard is bafin.
On the eve of the crash, finance minister olaf scholz (SPD) had already announced his intention to review the supervisory structures. O-ton scholz: "the case of wirecard AG is a scandal without equal in the financial world."The ministry of finance is to draw up a concept in the next few days.
The auditors, who have audited the group’s financial statements and found no evidence of manipulation in recent years, have also come in for criticism, as has bafin. The ministry of economics also sees the auditing companies in the responsibility. "Of course, they have to recognize errors in balance sheets early on, and if things have gone wrong, then they have to make an active contribution to working it up," said a spokeswoman.
In the past few days, wirecard has seen one piece of bad news after another: on thursday, the company filed for insolvency. The loser was the admission of presumed air bookings in the amount of 1.9 billion euros – now there is the threat of insolvency. The auditing firm EY, which audited the annual financial statements for 2019, assumes extensive fraud on an international scale. Munich public prosecutor’s office investigates ex-CEO markus braun and other former and active top managers.
The EU commission’s letter to ESMA (the european securities and markets authority) in paris states that a comprehensive description and analysis of the events and an assessment of whether the reaction of the supervisory authorities was appropriate are necessary. An important consideration is said to be the protection of investors. The letter was written by the commission’s directorate general for financial market stability, and is addressed to ESMA chief steven maijoor.
Wirecard shares did not stop on friday either. They sank to 1.08 euros, the lowest level in 17 years. They closed almost 64 percent lower at 1.28 euros. A wirecard share was worth just under 144 euros before the outbreak of the corona crisis in mid-february. The losses for investors in these four months or more add up to around 18 billion euros. Many of the almost 6,000 employees and small shareholders worldwide are now sitting on virtually worthless securities.
The future of the company, and whether wirecard has any prospects at all, is still completely unclear. The management board had declared on thursday that the continuation of the company was "not ensured.
The munich district court had appointed the lawyer michael jaffe as preliminary insolvency administrator, who must now first assess the viability of the company – which may take some time in view of the very difficult situation. The wirecard board of management is now no longer the master of its own house and is no longer allowed to make a fuss, while the employees in germany receive insolvency pay.
Meanwhile, there is speculation about the whereabouts of one of the scandal’s key figures. According to data from the philippine immigration office, former wirecard executive jan marsalek entered the southeast asian country on tuesday and continued to china via cebu airport on wednesday. However, airport video footage did not show marsalek leaving the country, justice secretary menardo guevarra told CNN philippines on thursday. In china, the corona crisis has led to a ban on foreigners entering the country – and those who are allowed in have to spend 14 days in quarantine.
Marsalek was responsible for day-to-day operations on the wirecard board and was dismissed without notice last monday. The public prosecutor’s office in munich has been investigating marsalek, ex-CEO markus braun and two other members of the board of management for weeks now.