Ac­count­ing watch­dog axed by the Ger­man gov­ern­ment

The Daily Telegraph - Business - - Business - By

Rachel Mil­lard

GER­MANY’S ac­count­ing watch­dog is set to be stripped of its pow­ers in the wake of the Wire­card scan­dal.

The Ger­man gov­ern­ment will end its con­tract with the Fi­nan­cial Re­port­ing En­force­ment Panel as soon as to­day, ac­cord­ing to re­ports.

The job of over­see­ing com­pany ac­counts will be taken on by Bafin, Ger­many’s fi­nan­cial reg­u­la­tor.

“We have reached an agree­ment with the Fi­nance Min­istry to ter­mi­nate the con­tract,” a Jus­tice Min­istry of­fi­cial told the Bild am Son­ntag news­pa­per

Ger­many has been rocked by the col­lapse of pay­ments com­pany Wire­card, which filed for in­sol­vency last week af­ter ad­mit­ting that €1.9bn (£1.7bn) of cash on its bal­ance sheet

‘What the Wire­card affair has shown is that… sel­f­reg­u­la­tion by the au­di­tors doesn’t work prop­erly’

prob­a­bly did not ex­ist. Markus Braun, chief ex­ec­u­tive of the Dax-listed com­pany, re­signed on June 19 and was sub­se­quently ar­rested on sus­pi­cion of ac­count­ing fraud and mar­ket ma­nip­u­la­tion.

Braun was re­leased last week af­ter post­ing bail of £4.5m.

Ger­man au­thor­i­ties are fac­ing ques­tions over their fail­ure to root out the scan­dal. Reg­u­la­tors even filed a crim­i­nal com­plaint against Fi­nan­cial Times jour­nal­ists as they pub­lished al­le­ga­tions of fraud against the fin­tech firm, once a stock mar­ket dar­ling.

Au­thor­i­ties in the Philip­pines have opened an in­ves­ti­ga­tion into the Wire­card scan­dal, as the com­pany had said the miss­ing £1.7bn was in two Philippine banks that have de­nied any con­nec­tion with the firm.

Jörg Kukies, Ger­many’s deputy fi­nance min­is­ter, told the Fi­nan­cial

Times: “What the Wire­card affair has shown is that… self-reg­u­la­tion by the au­di­tors doesn’t work prop­erly.”

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