Wire­card a mas­sive crim­i­nal act: BaFin

The Daily Telegraph - Business - - Business - By Michael O’Dwyer

GER­MANY’S top fi­nan­cial reg­u­la­tor branded the ac­count­ing scan­dal at Wire­card a “mas­sive crim­i­nal act” as the coun­try’s author­i­ties face a back­lash over their fail­ure to pre­vent the pay­ments firm’s col­lapse.

Felix Hufeld, the pres­i­dent of BaFin, Ger­many’s top fi­nan­cial reg­u­la­tor, said: “It is plain vanilla, old-fash­ioned crim­i­nal be­hav­iour.”

Wire­card filed for in­sol­vency last week af­ter re­veal­ing that €1.9bn (£1.7bn) of cash on its bal­ance sheet prob­a­bly does not ex­ist.

Mr Hufeld’s al­le­ga­tions of crim­i­nal­ity came a day af­ter pros­e­cu­tors and po­lice raided Wire­card’s Mu­nich head­quar­ters and four other sites in Ger­many and Aus­tria as part of the in­ves­ti­ga­tion of one of the big­gest ac­count­ing scan­dals of the cen­tury.

Author­i­ties in Sin­ga­pore and the Philip­pines are also in­ves­ti­gat­ing the case.

Reg­u­la­tors, au­di­tors and in­vestors are fac­ing scru­tiny over their fail­ure to ques­tion Wire­card’s man­age­ment when the Fi­nan­cial Times pub­lished al­le­ga­tions of fraud at the com­pany.

As a fi­nan­cial tech­nol­ogy com­pany Wire­card fell into a reg­u­la­tory grey area in Ger­many. Mr Hufeld told the Bun­destag’s fi­nance com­mit­tee on Wed­nes­day that de­ci­sions about how to cat­e­gorise Wire­card were made in con­junc­tion with the Bun­des­bank and the Euro­pean Cen­tral Bank. He pre­vi­ously called Wire­card’s demise “a com­plete dis­as­ter”.

Newspapers in English

Newspapers from UK

© PressReader. All rights reserved.