05 Nov 2020
Germany’s financial establishment came under pressure yesterday after its handling of the collapse of Wirecard, the digital payments company, was strongly criticised by Europe’s markets watchdog.
Bafin, the German regulator, faces questions about its competence and probity after the European Securities and Markets Authority said that it was deficient in several ways, while also noting legal and procedural blockages leading to the country’s biggest corporate scandal for several decades.
Bafin, which is meant to police German financial markets and to safeguard the country’s business reputation, gave details about events relating to Wirecard on several occasions to the finance ministry, in some cases before it had taken any action, raising questions about its independence, the Paris-based authority said.
Bafin, whose president is Felix Hufeld, also failed to pick up on the fact that some of its market abuse team were buying and selling Wirecard shares. Germany’s Financial Reporting Enforcement Panel, the accounting regulator, was criticised as well.
Wirecard, which provided technology to process payments, grew rapidly to become Europe’s most valuable financial technology company. However, it came under faced sustained challenges from some investors and analysts, as well as in the media, including the Financial Times. At the time, the company aggressively rebutted the claims, while Bafin opened investigations into short-sellers and journalists.
Wirecard collapsed into insolvency owing €3.5 billion in June amid an accounting scandal. Markus Braun, the Munich-based company’s former chief executive, and other bosses have been held on suspicion of running a criminal racket. They deny any wrongdoing. Jan Marsalek, Wirecard’s fugitive former chief operating officer, is among the world’s most wanted men.
By Katherine Griffiths and James Hurley, The Times, 4 November 2020
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