German Finance Minister denies responsibility for Wirecard scandal
Germany’s finance minister on Thursday denied responsibility for the collapse of payments firm Wirecard in a parliamentary inquiry that will also put Chancellor Angela Merkel in the hot seat.
“The government does not bear responsibility for this large-scale criminal fraud,” Finance Minister Olaf Scholz told lawmakers investigating the case which he described as the “biggest accounting fraud scandal” in the history of post-war Germany.
Once a rising star in the booming fintech sector, Wirecard filed for bankruptcy last year after admitting that 1.9 billion euros ($2.3 billion) was missing from its accounts.
The company’s former chief executive Markus Braun and several other top executives were arrested on fraud and money-laundering charges.
Lawmakers are investigating the political and regulatory failings that allowed the Wirecard cheating to go unnoticed for years, with critics saying early warning signs were ignored.
But asked if bore personal responsibility for the scandal, Scholz also emphatically replied: “No.”
Facing the committee two days after Economy Minister Peter Altmaier, the finance minister admitted however that official regulators were “not prepared enough” for the scandal and pledged to “rebuild trust” in Germany as a financial centre.
The focus on politicians’ roles in the drama comes at an awkward time for Merkel’s ruling conservatives and their Social Democratic (SPD) coalition partners, five months before a general election.
Earlier, German Finance Minister Olaf Scholz faced a parliamentary committee on Thursday into last year’s collapse of payment group Wirecard, which shook the business world and threatens to overshadow September’s national election.
Scholz, who is also vice chancellor, is set to head up the election campaign for the centre-left Social Democrats, the junior members of Chancellor Angela Merkel’s conservative-led coalition.
The scandal was triggered in June, when Wirecard collapsed after admitting that 1.9 billion euros ($2.3 billion) in assets likely did not exist.
This in turn prompted a plunge in the company’s shares and the arrest of former executives, leading to doubts about the effectiveness of financial oversight authorities in Europe’s biggest economy.
Economy Minister Peter Altmaier appeared earlier this week, telling committee members he is drafting stricter compliance rules for the auditor oversight body, Apas.
Central to the committee’s questioning of Scholz will be his political role in the Wirecard scandal because of the Finance Ministry’s responsibility for financial regulator Bafin, which has come under fire for its handling of the affair.
Merkel is also to appear before the committee on Friday to be quizzed about the affair