The Munich Regional Court has sentenced three former Wirecard board members to pay 140 million euros in damages.
Wirecard’s insolvency administrator has achieved an important success in the legal dispute against the company’s former board members. The Munich Regional Court has sentenced three former executives of the scandal-ridden company, including former CEO Markus Braun, to pay a total of 140 million euros in damages plus interest. In the court’s opinion, they had acted at least negligently when granting a loan and subscribing to bonds and are therefore responsible for the damage caused.
The plaintiff in the case was insolvency administrator Michael Jaffé, who is acting in the interests of the creditors. The aim of the lawsuit was to recover funds that were lost in Wirecard’s dubious business practices. However, the ruling is not yet final and observers assume that the board members concerned will appeal.
Wirecard, once celebrated as a rising star on the stock market, collapsed in June 2020 when it was revealed that supposed balances of 1.9 billion euros in the Philippines did not exist. The case is considered one of the biggest financial scandals in post-war German history and set in motion a series of criminal investigations against the payment processor’s executives.
However, Jaffé suffered a defeat in one part of the lawsuit. The former deputy chairman of the supervisory board, Stefan Klestil, was released from the obligation to pay, although the court found that he had violated his supervisory duties. According to the ruling, however, it is questionable whether measures taken by the supervisory board could have prevented the damage, as the management board had not adhered to its instructions in the past.
The court, however, saw clear responsibility in the case of the three convicted board members. The loan in question was not secured and no thorough examination was carried out before the bonds were signed. Markus Braun and the CFO in particular were held directly responsible for the wrong decisions due to their departmental responsibilities.
The ruling concerns a loan of EUR 100 million and the subscription of bonds for a further EUR 100 million to the benefit of the company Ocap. However, part of the loan was repaid with EUR 60 million from the bonds, so the damage incurred amounts to EUR 140 million.
It remains unclear whether and how much of the sentenced sum the insolvency administrator can actually collect. The managers are liable with their private assets, but it is questionable whether this is sufficient. Wirecard’s manager liability insurance is also unlikely to apply, as it does not usually pay out in the case of criminal offenses.
Markus Braun is currently on trial with other managers on suspicion of fraud, while former sales director Jan Marsalek has gone into hiding. Klestil, on the other hand, has been spared any criminal charges.
