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Wirecard scandal: the federal government is planning this new law

2020-12-16T14:32:51.062Z


With a new law, the federal government wants to prevent a second Wirecard case. But opposition politicians criticize many loopholes.


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Federal Finance Minister Olaf Scolz (SPD): "The supervisory authority gets more bite"

Photo: Kay Nietfeld / dpa

The federal government is drawing conclusions from the spectacular accounting scandal at the former Dax group Wirecard: Complex company structures are to be controlled more closely.

To this end, the cabinet passed a draft law that gives the Federal Financial Supervisory Authority (Bafin) more powers.

In addition, stricter rules for statutory auditors will be introduced.

"The bill is a decisive step to strengthen the balance sheet control, to reform the auditing and to crack down on criminal machinations," said Finance Minister Olaf Scholz (SPD).

Scholz promises "more bite"

Among other things, it will ensure that the balance sheets and certificates of auditors can be relied on more.

"The rules are being tightened significantly and the supervisors are getting more bite," announced Scholz.

The Bundestag still has to approve the changes.

The new rules are designed to prevent another scandal like the one with the now insolvent fintech company Wirecard.

The group is said to have reported fictitious profits since 2015.

In the summer he had admitted air bookings of 1.9 billion euros - according to investigations by the public prosecutor's office, it could go up to more than three billion euros.

EY's auditors, its regulatory agency Apas and the financial regulator Bafin have come under fire because the fraud was not noticed earlier.

Due to the scandal, some weaknesses in the balance sheet had become clear, said Scholz on Deutschlandfunk.

"We found out that many possibilities do not even exist that we probably all hoped somehow that they would normally be used." The Federal Government draws the following conclusions:

Bafin investigations

: Financial supervision has so far only come into play late in the review of listed companies.

Initially, private auditors were responsible for auditing the accounts, then the German auditing agency under private law (DPR).

That is changing now.

In the event of suspected cases, the Bafin will in future be directly responsible for inspections - if necessary even against the will of the company.

However, the law does not provide for a fundamental reform of the Bafin.

Auditors

: In future, auditors should change every ten years at capital market companies so that they do not become operationally blind.

They should also no longer be allowed to examine and advise a company at the same time.

In addition, the auditors are made more liable: The maximum liability limits for auditing capital market-oriented companies are increased by four times to 16 million euros.

In the case of grossly negligent behavior, there is no longer any maximum limit.

Penalties

: The "false balance sheet oath", ie when it is falsely claimed that a financial statement gives an accurate picture of the situation of a company, should be sanctioned with up to five years' imprisonment.

"This also applies to an incorrect certificate from the auditor on the conclusion of a company of public interest," said Justice Minister Christine Lambrecht (SPD).

Financial transactions of Bafin employees

: Private financial transactions of Bafin employees should be severely restricted in order to avoid any appearance of a conflict of interest.

Opposition members commented that the federal government was tackling some long overdue conclusions with its law.

However, there are still loopholes, for example in the rules for the auditor supervision Apas, said the Green finance politician Danyal Bayaz.

The balance sheet control procedure is also still not powerful enough.

Bayaz, FDP finance politician Florian Toncar and Fabio De Masi from the Left accused Scholz of staging the law and protecting himself.

"But that does not replace the investigation," they emphasized with reference to the Wirecard scandal.

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hej / dpa

Source: spiegel

All business articles on 2020-12-16

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