Opening of the Wirecard trial, the biggest scandal in German finance
The trial of the former CEO of Germany’s Wirecard opened Thursday in Munich, two and a half years after the payment provider’s bankruptcy that rocked the financial and political worlds.
All eyes are on Marcus Browne, who is at the helm of this flagship of the digital sector, fooling people until it collapses in June 2020.
Will this 53-year-old Austrian, who has been in pretrial detention since the beginning of the investigation, lift the curtain on the embezzlement charges?
He denies any wrongdoing and considers himself the victim of more fraud, but has never detailed the facts. Wearing a blazer and turtleneck, he began answering the judges’ questions about his identity on Thursday, AFP journalists noted.
The tea trial began in a secure room at Stadelheim prison in the Bavarian capital and will continue until at least 2024.
– Billionaire boss –
During the years of Wirecard’s meteoric rise, Marcus Brown, a computer engineer by training, developed similarities with former Apple chief Steve Jobs, as he wore dark turtlenecks and laid out his vision for the digital future.
But the Munich public prosecutor’s office sees him as a simple fraud who acted as a ringleader and, according to then-finance minister Olaf Scholz, who has since become chancellor, holds him largely responsible for a scandal “unprecedented” in post-war Germany.
Mr. Brown is charged with accounting fraud, market manipulation, especially serious breach of trust and organized fraud.
Two former executives will also be in the defendant’s box: former chief accountant Stefan von Erffa and Oliver Bellenhaus, a former director of a Dubai-based subsidiary who will appear as a “key witness” for the prosecution.
In 2002, Mr. Braun, who led the fledgling startup that made money from porn and gambling sites, in 2018 promoted Wirecard to the elite Dax index of the German Stock Exchange.
The Aschheim firm in southern Germany was worth more than the behemoth Deutsche Bank at the time, and Mr Braun, who owned 7% of the shares, was a billionaire.
– fictitious sales –
Wirecard went public in June 2020 after its executives admitted that 1.9 billion euros in assets, a quarter of the size of the balance sheet, did not actually exist.
The central actor in the alleged fraud, Mr Brown’s former right-hand man, Austrian Jan Marsalek, has been on the run for two-and-a-half years.
Mr. Marsalek, 42, is suspected of involvement within certain secret services and of ties to Russian or Libyan interests, and the case is drawn with him into a spy novel.
The investigation revealed that Wirecard’s accounts for the years 2015-2018 were embellished to make the company attractive to investors.
Some of the fee-based commissions came not from Wirecard, but from third parties allegedly licensed to operate in the Asia and Gulf region.
However, according to the indictment, “there was no actual reseller relationship by these partners” and therefore no material turnover.
However, Wirecard has been able to finance itself for years to cover its real losses.
– Serious policies –
As a result of the bankruptcy, shareholders lost more than 20 billion euros, and creditor banks lost 2 billion euros.
The case exposed the shortcomings of the German financial market watchdog (BaFin), which is controlled by the Ministry of Finance, and the multinational auditing firm EY.
Volker Brühl, a professor at the Center for Financial Research in Frankfurt, believes that “policy should ensure that supervision works”, but “there are gaps”.
No one was “ready to admit that the fraudsters were working for Wirecard,” he explains to AFP.
The political world, until the former Chancellor Angela Merkel, who traveled to China with the former CEO of Wirecard, did not succeed in the parliamentary inquiry to emphasize the responsibility of those who govern.
