The federal government is drawing the first consequences from the scandal surrounding the collapsed payment service provider Wirecard. The cooperation with the “German Audit Office” (DPR), also called the balance police, will be ended, the Ministry of Justice confirmed on Sunday in Berlin. “We have reached an agreement with the Ministry of Finance to quit,” said a spokesman. State Secretary Jörg Kukies confirmed in the “Financial Times” that in future the Federal Financial Supervisory Authority (Bafin) will investigate directly instead of commissioning the DPR. The self-control of the industry via auditors did not work either. Therefore there must be changes in the control. Berlin law firms have announced class action lawsuits against the Federal Republic due to negligence on the part of the authorities.
Wirecard filed for bankruptcy on Thursday due to a lack of 1.9 billion euros in the balance sheet and the risk of overindebtedness. It is one of the largest bankruptcies in the Federal Republic that shakes confidence in Germany’s financial center.
Determined with minimal effort
State Secretary Kukies called the affair a wake-up call to address long-standing problems. Radical solutions would have to be found. This is the only way to contain the consequences of the Wirecard case.
Kukies admitted that the Bafin had only had limited clout so far. The authority had already activated the “balance sheet police” in 2019 after repeated indications of inconsistencies at Wirecard. The association, which is organized under private law, has been auditing balance sheets on behalf of the government since 2005. However, this did not reveal any information until bankruptcy. According to a report by the “Frankfurter Allgemeine Sonntagszeitung”, the investigation was carried out with minimal effort. Essentially, only a single employee was entrusted with it. The test center has not brought in any external help, the newspaper continues. To date, the Bafin has not received a result of the special inspection by the DPR.
Kukies also called it a mistake in the “Financial Times” that Wirecard was treated as a technology company and was therefore not directly under the financial supervision. From the federal government’s point of view, European supervision for such payment service providers is needed. Germany has long campaigned for this, he emphasized. The events around Wirecard would certainly speed this up now.
Class action against the Federal Republic
Berlin lawyers Wolfgang Schirp and Marc Liebscher said they had been commissioned by Wirecard investors to file a class action lawsuit against the Federal Republic. The reason is the failure of the supervisory authorities. Bafin and the “balance sheet police” DPR had made blatant mistakes. “For this we will sue the Federal Republic of Germany for damages for our clients,” said Marc Liebscher. According to the lawyers, it must also be checked whether EU law has also been violated due to insufficient supervision.
Meanwhile, the Wirecard board assumes that a provisional insolvency administrator will shortly be appointed for the bankrupt company. Despite the application for bankruptcy, business operations will continue, Wirecard said on Saturday. This is in the best interest of the creditors. Wirecard Bank is currently not part of the bankruptcy proceedings and electronic transfers by Wirecard Bank are not affected. (apa, reuters)
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