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Material battle: The members of the Wirecard investigation committee evaluated almost a terabyte of confidential documents and questioned around 80 witnesses
Photo: Hannibal Hanschke / REUTERS
They met for more than 300 hours - the nine members of the Wirecard investigation committee.
Often late into the night.
They evaluated almost a terabyte of confidential documents, interviewed a good 80 witnesses, and deployed two special investigators to find out how a DAX corporation, once worth over 20 billion euros, could implode and damage thousands of investors.
What the committee has brought to light since October last year has cost almost a dozen high-ranking government and bank employees jobs, reputations or bonuses.
The most prominent resignations include those of
Felix Hufeld
(59) as head of the financial supervisory authority Bafin and his deputy
Elisabeth Roegele
(53).
The four most important realizations and a dead end:
1. EY auditors: superficial and bumbling
The individual points of criticism in themselves sound half as dramatic: "A systematic analysis of the fraud indicators could have led to an increased critical attitude," write auditors from Rödl & Partner in an opinion on the work of their colleagues from EY, who worked for Wirecard for eleven years - have audited balances.
Elsewhere it says: "The quality of the documented audit evidence is not consistently highly reliable."
But all in all, what Rödl & Partner describe in their 91-page report on behalf of the investigative committee is devastating. Accordingly, the EY experts did not fully implement auditing standards, relied on oral information from the Wirecard Management Board on important issues and did not obtain any further evidence. Warning signs and inconsistencies remained without consequences.
This increases the pressure on the Big Four company, which has already lost a number of high-profile customers and is battling claims for damages from Wirecard shareholders.
The Munich public prosecutor's office is also investigating the EY auditors who have audited Wirecard's annual financial statements.
EY is contrite: The results of Rödl & Partner - as well as the findings of other ongoing investigations - will flow into their own assessment of the situation and the necessary conclusions will be drawn from them, EY announced.
So far, Rödl & Partner have focused on the years 2014 to 2016 in their examination.
The committee has expanded the mandate.
The special auditor is expected to present the next report at the end of May.
2. Control authorities: no compliance rules
It is approaching midnight when a statement is made at a meeting of the Wirecard committee at the beginning of December that perks everyone up again: Just before the bankruptcy and while his agency is investigating the Wirecard scandal,
Ralf Bose
(55), head of the auditor oversight Apas, even traded shares in the group.
A few weeks earlier it had become known that dozens of employees of the Bafin banking supervisory authority were doing business with Wirecard papers.
A particularly large number of them worked in the department responsible for compliance with the rules on insider trading.
Bafin and Apas are two control bodies that failed at Wirecard.
You did not follow up on warning signals early on and in some cases passed responsibility on to others.
However, the members of the investigative committee have revealed another weakness of the authorities: lax regulations in dealing with private share transactions by employees.
Bose has since lost his job, as have individual Bafin employees.
The banking supervisory authority has already tightened its rules for stock purchases by its employees.
You may not own any securities from companies that are regulated by the authorities.
At Apas this is still in progress.
At the accounting police DPR, on the other hand, there were already stricter compliance rules, but DPR President
Edgar Ernst
(69) ignored them.
In 2017, he accepted a new supervisory board mandate, although this violated internal guidelines.
These details became public in mid-February when Ernst had to explain himself to the Wirecard investigative committee.
Due to pressure from the federal government, Ernst is withdrawing from the FREP at the end of the year.
3. Ban on short selling: poor craftsmanship
There is probably no topic that the committee members examined more closely than a decision by the Bafin in February 2019: The authority imposed the so-called short sale ban to prevent speculation on falling prices with borrowed Wirecard shares. A one-time decision. It appeared to outsiders as if the supervision wanted to protect the group.
In painstaking detailed work, the parliamentarians uncovered that the decision was made with great technical errors. Bafin, for example, did not ask the Bundesbank, which was extremely skeptical about the matter, for a formal statement. That would actually have been intended in this case. The Bundesbank had informally signaled to the financial supervisory authority that it did not believe in the idea - but BaFin brushed these concerns aside, nor did it inform the European financial supervisory authority ESMA of the Bundesbank's counter-arguments.
The Bafin also relied on information from the Munich public prosecutor's office, the plausibility of which is controversial. The investigators warned the authorities that Wirecard was being blackmailed - by employees of the Bloomberg news agency. They demanded six million euros, otherwise one would get into the negative coverage of the "Financial Times". An extremely untrustworthy story, which Bloomberg vehemently denies when it becomes known this spring.
For the Bafin, this was important information at the beginning of 2019, which ultimately led to the short sale ban - especially since the Munich public prosecutor's office made it clear that these threats must be taken very seriously.
Several employees of the authority put this on record in the committee of inquiry.
The MPs therefore give the investigators complicity in the short sale ban.
The public prosecutor's office defends itself: The Bafin were not given any recommendations for action, but simply passed on information.
4. Wirecard: shocking insights
The committee members get their first deeper insight into the inner workings of Wirecard from the former supervisory board member
Tina Kleingarn
: In a six-hour meeting, she describes a group that ignored central rules for good corporate governance, did not take cooperation with the supervisory board and auditors seriously and took all attempts to opposed to improving the conditions and introducing professional structures.
Other witnesses paint a similar picture, for example the former head of compliance of the group
Daniel Steinhoff
, who now works for the Wirecard insolvency administrator
Michael Jaffé
. After the bankruptcy of the company, there is no evidence to be found of the company's supposedly long-standing Asian partnership, which is said to have provided the majority of sales and profits. No communication, no price lists, no references to checking customers and their risk profile.
Other former employees and the last chairman of the supervisory board,
Thomas Eichelmann
, also hit the same line
.
What they report about the company does not sound like a Dax group, but rather the rubbish that Wirecard was in the beginning when the provider processed payments for gambling and porn online offers.
A number of witnesses are addressing some of the causes that will plunge Wirecard into the abyss in the summer of 2020.
5. Federal government: no special treatment
There are very poisonous and angry dialogues that members of the committee of inquiry
deliver
this week with high-ranking politicians such as Federal Finance Minister
Olaf Scholz
(62, SPD). It is about deleted e-mails from a private account and the failure of the Bafin banking supervisory authority monitored by Scholz. Chancellor
Angela Merkel
(66, CDU) was
interviewed in a similar
way. She campaigned for Wirecard on a trip to China in 2019 - at the special mediation of the former Minister of Economics Karl-Theodor zu Guttenberg.
The committee has not yet been able to present a smoking gun, the ultimate proof that Wirecard received special treatment or that the government deliberately covered up questionable actions by the group.
At the end of the day, Danyal Bayaz
(37) from the Greens sums up Merkel's appearance as follows: "The Chancellery and her ministers have poorly prepared Merkel for her visit to China. The necessary distance and sensitivity for compliance was lacking." And
Fabio De Masi
(41), financial expert of the left, admitted after the statements of Scholz in the SPIEGEL: The Wirecard scandal was for the SPD chancellor candidate "like a war injury, he limps, but he does not fall."
