Germany’s biggest fraud case is underway as the former executives of payments company Wirecard go on trial after a scandal that rocked the German establishment.
In a new bomb-proof court built 5 meters underground to try suspected terrorists, CEO Markus Braun will appear.
He and two other Wirecard executives, Oliver Bellenhaus and Stephan von Erffa, are charged with fraud and market manipulation for their alleged role in the payments company’s collapse.
They could be jailed for up to 15 years if found guilty.
Wirecard was at one point valued at $28bn (£22.9bn). It rose to prominence, growing from a pornography and gambling payments processor to a respected technology company, listed on the Frankfurt Stock Exchange and a constituent company in the Dax index of leading German companies. order.
The prosecution argued that Wirecard management fabricated the company’s earnings to mislead investors and creditors.
Mr. Braun was in custody since 2020 and the company has admitted that 1.9 billion euros (£1.63 billion) had gone missing, but he denied embezzling money and accusing others of running a phantom operation without his knowledge.
He was arrested for a second time in July 2020, suspected of being part of an organized criminal enterprise that obtained more than 3 billion euros from creditors in a scheme based on false accounts.
Wirecard’s fall was meteoric. It became the only Dax member to file for bankruptcy, owing its creditors nearly $4bn (£3.28bn). The fall shook German politics and regulators and damaged the country’s business reputation.
The company included the former German Chancellor Angela Merkel as a supporter as she lobbied for Wirecard in China as it pursued an acquisition. For a short time, she considered bailing out the company.
Current Chancellor Olaf Scholz was also criticized when he was finance minister under Mrs Merkel.
Criticism had been leveled at Mr. Scholz for his lack of oversight of the business during his financial tenure. In the wake of the scandal, he strengthened the powers of Germany’s financial regulator, BaFin, and set up a new watchdog leadership. The head of BaFin and the boss of the German accounting watchdog had resigned following the disappearance of the company.
Wirecard had successfully pressured German authorities not to investigate the company and instead look into investors and journalists alleging wrongdoing.
Ms. Merkel and Mr. Scholz said they were not responsible for the scandal.
Former leader Mr Bellenhaus became a key witness after turning himself in to German authorities in 2020, while Mr von Erffa expressed regret over the Wirecard events but denied orchestrating them. His lawyer told Reuters that Mr von Erffa did not want to comment on the charges.
Former Wirecard chief operating officer Jan Marsalek, a key suspect and currently an international fugitive whose whereabouts are unknown, is not on trial.
A verdict is not expected until 2024 at the earliest and there are hundreds of court dates scheduled until the end of 2023 to hear the case.
