"The best risk manager is not immune to fraud"

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Christian Sewing:

The head of Deutsche Bank also testified to the Wirecard investigation committee on Thursday

Photo: Arne Dedert / dpa

It was not the answers that members of the Wirecard committee of inquiry had hoped for from their witness.

"Where would you locate the mistake that was missing from the disaster?"

Deutsche Bank boss

Christian Sewing

(50)

replied that he would not presume to take an opinion, he did not know enough about the entire matter

.

Hadn't he also had doubts about Wirecard's behavior?

"Personally, I was too far away to doubt."

Did the risk management of Deutsche Bank not have failed with the customer Wirecard, to whom the institute granted loans?

"The best risk manager is not immune to fraud."

The parliamentarians summoned seven board members of major German banks as witnesses on Thursday and this Friday - in addition to Sewing, the former Commerzbank CEO Martin Zielke (57) and the heads of risk at Commerzbank and BayernLB, top bankers from Goldman Sachs, LBBW and KfW.

The committee members wanted to get a better picture of the collapse of the former Dax group Wirecard, what led to it and how it could have been prevented.

An interim conclusion for the Green MP Danyal Bayaz (37) was as follows: Some banks have done their homework, others not.

The first group includes BayernLB.

In spring 2018, the institute decided not to give Wirecard any more credit.

BayernLB had been one of the financiers of the group for just two years, which in Germany had long been traded as a tech hope of the caliber of a Silicon Valley provider and was relentlessly pushed into the Dax.

"If we give up 150 million, then we have to understand the customer very, very well"

Marcus Kramer,

BayernLB's Chief Risk Officer

Marcus Kramer

(60), Chief Risk Officer of the Munich money house, justified the exit from Wirecard when he appeared in the Bundestag, among other things with a difficult to understand balance sheet structure and an opaque market in which the company operated.

A few other reasons were added: The company actually wanted to use the first few years of the business relationship to get to know Wirecard better and to get answers to a number of questions.

"But then some of the answers raised new questions," said Kramer.

When it came to increasing the loan from 60 to 150 million euros, BayernLB drew a line.

"If we give up 150 million," says Kramer, "then we have to understand the customer very, very well."

That was simply not the case with Wirecard.

However, the BayernLB risk manager did not consider fraudulent transactions, as described in the Financial Times, to be possible.

"We never believed that criminal acts took place there."

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"I was amazed"

: Ex-CEO of Commerzbank,

Martin Zielke

Photo: Ralph Orlowski / REUTERS

Commerzbank was also one of the first in the industry to find the payment group questionable - a good year before the company's spectacular collapse.

Three of his board colleagues came to him in spring 2019, said the then CEO

Martin Zielke

(57).

They agreed that the bank should no longer do business with the long-standing customer Wirecard - among other things because of compliance problems.

"I was amazed," admitted Zielke on his appearance on the Wirecard investigative committee, "and asked myself: Is it right to go out to a DAX company. But the reasons were convincing."

He therefore followed the opinion of his colleagues.

It was therefore clear: Commerzbank will cut its connections to Wirecard and, among other things, also terminate its credit relationship with the company.

The specific trigger were reports in the "Financial Times" about dubious deals that triggered an internal investigation at Commerzbank.

The institute stumbled upon suspicious transactions by Wirecard Bank in Asia and sent reports of suspected money laundering to the Federal Financial Intelligence Unit (FIU).

Commerzbank processed cross-border payments for Wirecard Bank and ended this in view of the results of the internal investigation.

The institute was unable to exit the loan relationship immediately, but has taken this step.

The money house and Wirecard agreed that the next time the loan was extended, a competitor should replace Commerzbank.

It did not come to that - due to the bankruptcy of the group at the end of June 2020.

Commerzbank got off lightly than Deutsche Bank

Commerzbank was part of a banking consortium that had granted Wirecard a loan of around 1.8 billion euros.

The Frankfurt money house was involved with 200 million euros and wrote off most of this sum in the summer of last year.

Deutsche Bank got away with a significantly smaller loss.

This was 18 million euros.

The bank had Wirecard, however, with 80 million euros, a smaller share of the syndicated loan than its competitor Commerzbank.

And Deutsche Bank had arranged hedging transactions to limit the risks.

Today most of the money that banks made available to Wirecard has disappeared - apparently with the help of dubious companies in Asia to which Wirecard gave loans.

The Munich public prosecutor's office accuses the former leadership of the group of commercial gang fraud.

Deutsche Bank had not only

granted

Wirecard, but also the subsidiary of

Markus Braun

(52) a loan - a total of 150 million euros.

The bank came out without a loss.

"Personally, I was too far away to doubt"

Christian Sewing

, head of Deutsche Bank

In mid-December 2019, Sewing informed the Wirecard boss that this loan would not be extended and would have to be repaid.

As security for this, Braun had deposited his Wirecard shares and the bank saw the value at that time as endangered.

The reason: The group had initiated a special audit by the auditing company KMPG in order to get rid of allegations of balance sheet manipulation.

Such an examination "harbors the risk that the underlying security is not so valuable," Sewing told the members of the committee of inquiry.

The KPMG special audit not only meant that Braun needed a new lender.

It also triggered the collapse of Wirecard.

Because the auditors could not prove the existence of a balance of 1.9 billion euros in accounts of Philippine banks.

Sewing also told MPs about talks with Wirecard about closer cooperation.

But nothing came of it because the discussions about it remained abstract.

Wirecard itself apparently wanted to go much further and, with the help of McKinsey's consultants, planned the takeover of Deutsche Bank.

"Project Panther" was the code name.

He only found out about this through media reports in the summer of last year, Sewing said.

Disturbing emails

The Wirecard investigation committee also confronted Sewing with a rather strange email sent by a Deutsche Bank supervisory board member of Wirecard boss Braun.

It is about reports from the "Financial Times" about suspected fraud at Wirecard.

The bank controller Braun asks him to "finish" the newspaper.

At Commerzbank, it is e-mails from analyst Heike Pauls that MPs use to get Zielke to explain.

Pauls wrote research reports on Wircard.

She agreed to hymns of praise for the company until the very end, defended the long-time boss Markus Braun against any criticism and instead attacked the "Financial Times" when it disclosed questionable events at Wirecard.

E-mails received by the investigative committee now show that Pauls provided Wirecard with information about critical investors.

Commerzbank then suspended research on stocks that Pauls last covered.

Zielke also held back on questions from MPs about what exactly Commerzbank had learned from the Wirecard disaster.

The internal processing is still ongoing.