Former Wirecard boss Braun to be quizzed by German lawmakers

wirecard

(Reuters) – Wirecard’s former boss Markus Braun is due to appear before a German parliamentary committee on Thursday, temporarily leaving jail to testify over the collapse of what was once hailed as Germany’s leading financial technology firm.

The committee of inquiry was set up by opposition legislators to investigate ties between German politicians and regulators and Munich-based Wirecard, which left investors billions of euros out of pocket when it imploded in June.

Braun, who has been charged with fraud and embezzlement, must face the investigative committee in person after a court rejected a request for him to appear by video link.

Wirecard’s ex-CEO, who has been in custody since shortly after stepping down in June, denies all charges. Braun is not expected to discuss the charges, but lawmakers expect him to talk about contacts with government and financial regulator.

German politicians and regulators face allegations of lax oversight of the fallen stock-market star, which unravelled after the discovery of a 1.9 billion euro ($2.2 billion) accounting hole.

Wirecard’s demise also embarrassed the German government, which prides itself on a reputation for rectitude and reliability, amid criticism that authorities ignored red flags.

As head of Germany’s finance ministry Olaf Scholz, the Social Democrat Party’s candidate to succeed Angela Merkel as Chancellor, is responsible for financial regulator BaFin, which has been criticised for failing to take Wirecard to task.

The finance ministry has said it will cooperate with the parliamentary inquiry and that it is working on stricter rules for auditors, supervision and accounting controls.

Prosecutors have also faced criticism for failing to spot problems at Wirecard, instead probing journalists at the Financial Times, which first published allegations relating to its accounting.

Reporting by Christian Kraemer; Writing by Thomas Escritt; Editing by Alexander Smith

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