Former Wirecard boss goes on trial in fraud scandal that rocked Germany By Reuters


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© Reuters. FILE PHOTO: Wirecard’s former boss Markus Braun listens, forward of testifying earlier than a German parliamentary committee in Berlin, Germany, November 19, 2020. REUTERS/Fabrizio Bensch/Pool/File Photograph

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By Jörn Poltz

MUNICH (Reuters) -The trial started on Thursday of the previous Wirecard chief govt who steered the funds firm by means of its rise and spectacular collapse two years in the past in a fraud scandal that shook German politics and tarnished the nation’s enterprise popularity.

The 53-year-old former CEO Markus Braun, who has been in custody since his arrest in 2020, and two different managers of the defunct blue chip agency face expenses together with fraud and market manipulation.

Braun walked into the courtroom with out talking sporting a darkish turtleneck jumper and jacket and carrying a laptop computer.

The trial, which started 45 minutes late, is going down in Munich’s largest and latest courtroom, a bomb-proof underground corridor constructed within the Stadelheim jail complicated.

The accused may very well be jailed for as much as 15 years if convicted.

Braun has denied embezzling cash from Wirecard and accused others of working a shadow operation with out his information.

A verdict just isn’t anticipated earlier than 2024 on the earliest.

Based in 1999 and primarily based within the Munich suburb of Aschheim, Wirecard’s fairy-tale rise reworked it from a cost processor for pornography and on-line playing to a showpiece for a brand new sort of German tech firm that would compete with the established titans of Europe’s largest economic system.

It displaced Commerzbank (ETR:) in blue-chip index and at one level was price $28 billion, however its demise embarrassed the Germany institution, putting politicians who backed the corporate and regulators who took years to research it underneath scrutiny.

After batting away suspicions of wrongdoing from buyers and journalists and efficiently lobbying the German authorities to research those that have been scrutinising its funds as a substitute, Wirecard was compelled to confess in June 2020 that 1.9 billion euros have been lacking from its steadiness sheet.

The prosecution has mentioned Wirecard’s administration invented huge sums of phantom income to mislead buyers and collectors.

The federal government of then Chancellor Angela Merkel, which had beforehand backed Wirecard’s pursuit of an acquisition in China, briefly thought of bailing out the corporate.

Nonetheless, inside days, Wirecard grew to become the first-ever DAX member to file for insolvency, owing collectors almost $4 billion.

EVIDENCE

Prosecutors will draw on proof from Braun’s co-defendant Oliver Bellenhaus, the previous head of Wirecard’s subsidiary in Dubai, who grew to become a key witness after turning himself in to German authorities in 2020.

One other former govt, Stephan von Erffa, can be on trial. He has publicly expressed remorse concerning the occasions at Wirecard however denied orchestrating them. His lawyer mentioned von Erffa didn’t wish to touch upon the costs.

A key suspect, Wirecard’s former chief working officer Jan Marsalek, is a global fugitive on Europe’s most needed record whose whereabouts are unknown.

Following Wirecard’s demise, the pinnacle of German monetary regulator BaFin resigned and the pinnacle of Germany’s accounting watchdog additionally stepped down.

Merkel and her then finance minister, now chancellor, Olaf Scholz confronted criticism for bungling oversight of the corporate.Merkel and Scholz have mentioned they aren’t in charge. Scholz beefed up BaFin’s powers and put in new management in 2021.

Scholz additionally criticised Wirecard’s auditor, EY, for failing to detect the fraud. EY has mentioned it acted professionally.

There are 100 courtroom dates provisionally scheduled till the tip of subsequent yr within the case.

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