He said the case was “a heavy blow” for Germany’s reputation as a financial center. Volkswagen was caught rigging diesel engines to cheat on U.S. emissions tests and paid more than 33 billion euros ($37 billion) in fines and settlements, while the chief executive and board chair of industrial conglomerate Siemens quit over a 2006-2007 scandal over bribing foreign officials to gain contracts. The missing 1.9 billion euros was supposed to be in trustee accounts but the two Philippine banks the company said held the money have said they have no dealings with Wirecard.
One is the complexity of Wirecard’s business model, which involves handling cashless payments among a complex network of credit card companies, merchants and and banks. “That is a documented failure of supervision to intervene when there was clear evidence in this case,” Florian Toncar, a member of parliament for the opposition Free Democratic Party, said in an interview on Norddeutscher Rundfunk public radio. Beginning in April 2015, the Financial Times blog FT Alphaville wrote a series of blog posts that questioned Wirecard's business model and criticised the company's accounting practices.
BaFin imposed the ban after the shares plunged on reports by the Financial Times that raised questions about the company’s accounting, including reports of backdated sales contracts that inflated revenue to meeting financial targets. In trying to explain what went wrong at the regulator, Toncar and others have pointed to BaFin’s limited range of authority.
An audit of Wirecard's key business in Europe and the US reportedly shows its internal financial numbers are far worse than previously thought Shalini Nagarajan Jul.
But Braun, known as an IT fanatic who styled himself after Apple’s Steve Jobs and his black turtleneck sweaters, grew the company into one of the biggest tech success stories in Wirecard handled payments between retailers and customers, and benefited as demand for online payment processing technology boomed. (AP Photo/Matthias Schrader, file)FILE - In this Thursday, April 25, 2019 file photo, Markus Braun, CEO of financial services company wirecard, attends the earnings press conference in Munich, Germany. Adding to the damage to Germany’s corporate reputation was the reaction of the financial regulator, BaFin, when media reports last year questioned the company’s accounting. Wirecard scandal puts spotlight on German company regulation5 takeaways from the second night of the Republican National ConventionRNC speaker pulled from lineup after retweeting anti-Semitic QAnon conspiracyRNC 2020 Day 2: Melania Trump headlines from White House Rose GardenDetails emerge after woman found alive in body bag at funeral homeFILE - In this Thursday, April 25, 2019 file photo, Markus Braun, CEO of financial services company wirecard, attends the earnings press conference in Munich, Germany. The shares were trading hands at around €2.65 on Thursday, comparedwith €104 last Wednesday.The German tech company, which was one of the country’s fastest-growing blue-chip companies, was thrown into crisis last week when EY said it was unable to trace about €1.9bn of cash in the company’s accounts. Prosecutors in Germany say that the former CEO of the payments company Wirecard has been arrested in an accounting scandal that centers on a missing sum of 1.9 billion euros, or 2.1 billion dollars. (AP Photo/Matthias Schrader, file) 6, 2020, 01:12 PM Thorsten Sellhorn, professor at Ludwig Maximilian University of Munich, said that Germany’s accounting watchdog, the Financial Reporting Enforcement Panel, was the first line of defense, not BaFin. Move comes after former CEO at payments firm held on suspicion of falsifying accountsGerman payments giant Wirecard has filed for insolvency in the midst of a major accounting scandal linked to a €1.9bn (£1.7bn) hole in its finances.The company, which processes tens of billions of euros in credit and debit transactions every year, said it failed to reach a deal with its lenders that could help it stay afloat following a turbulent week that involved the resignation and arrest of its chief executive. Instead, the company’s board of directors “would be much closer to home” and the first stop if outside auditors had questions. © 2020 Guardian News & Media Limited or its affiliated companies. BaFin said the short sales ban was to protect market integrity and investors, not the company. The company last reported an annual turnover of more than €2bn (£1.8bn) and made €1m a day profit.It became one of Germany’s 30 most valuable listed companies when it joined the bluechip Dax index in 2018, but investors and journalists started to question the company’s meteoric rise, highlighting inconsistencies in its accounts and the sums it spent to buy obscure businesses in Asia as part of global expansion plans.Wirecard’s business model was clearly complex, involving cashless payments across a vast network of credit card companies, retailers and banks.
Wirecard’s troubles have a specific focus: they call into question the honesty of the financial statements that its investors and creditors relied on. Wirecard declined to comment following the EY statement.Before an accounting scandal brought Wirecard to its knees, the 20-year-old payments firm was Germany’s tech darling.The company, which was founded in Munich in 1999 by its now former chief executive Markus Braun, started out as a payment processing system focused on internet casinos and erotic websites. The company, founded in 1999, employs about 5,800 staff across its 26 locations and has more than 313,000 customers, according to its website.The company’s shares, which have lost more than 95% of their value within days, were temporarily suspended from trading in Frankfurt. By Monday, the management board admitted that the funds in all likelihood “Braun presented himself to police and was arrested on Monday evening.