German Lawmakers Push For Further Questioning Of Former Wirecard CEO Braun
German lawmakers are determined to call back Wirecard AG‘s former CEO Markus Braun to give further testimony after he refused to answer their questions during a hearing in Berlin about the downfall of the once high-flying European FinTech company.
Braun’s appearance was his first since being detained by authorities in July over his connection with the collapse of the German payments firm, according to a Bloomberg report on Friday (Nov. 20).
“I guarantee one thing: We will invite him again as a testee to the committee,” Danyal Bayaz, a Green Party lawmaker, told Bloomberg TV. “This was not the last time we have seen Markus Braun in the German Bundestag.”
German lawmakers are moving to formally require Braun to substantiate why he refused to answer questions. If he fails to convince lawmakers, Braun could face fines and additional jail time, Free Democratic lawmaker Florian Toncar told Bloomberg Radio.
“We need him as a testee in order to clarify the political networks and the political contacts between Wirecard and the German government,” Bayaz told Bloomberg. “He was sort of respectless toward the German Bundestag, but also toward the German public and many, many investors who have lost a lot of money.”
Bayaz said that despite Braun’s silence during the hearing, the former CEO has said he is willing to cooperate with a criminal investigation. However, prosecutors are still waiting for his testimony.
Wirecard, once a darling of the European payments scene, filed for insolvency in June after it came to light that there was a missing $2.1 billion that the company initially claimed was deposited in the Philippines, but later revealed didn’t exist at all.
Braun refused to answer questions after delivering his statement, with even basic inquiries from MPs on the subject of his PhD thesis or whether he had a daughter going unanswered, the Financial Times reported on Thursday (Nov. 19).
This caused an outrage among the MPs, who said Braun was destroying people’s faith in German institutions and that he had led a gang of “white-collar criminals who for years ran an elaborate fraud scheme, hoodwinked banks and investors and embezzled billions of euros,” with crimes punishable by years in prison, the report said.
The committee is also set to look at the reasons why German politicians, including Chancellor Angela Merkel, lobbied for Wirecard even after the irregularities in the company’s dealings came to light, FT wrote.
On Sept. 29, it was revealed that an EY auditor alleged the global accounting firm was warned as far back as 2016 that senior managers at the German payments company may have committed fraud and that one had tried to bribe an auditor, according to FT.
Details of the allegations were included in an unpublished section of a special audit into Wirecard by KPMG. In the audit, KPMG said the 2016 allegations were not properly investigated by EY, which approved the company’s financial accounts without reservations for more than a decade.
In mid-September, EY Global Chairman and CEO Carmine Di Sibio expressed regret over the accounting firm’s failure to uncover fraud sooner.
“Many people believe that the fraud at Wirecard should have been detected earlier and we fully understand that,” he wrote in a letter obtained by FT. “Even though we were successful in uncovering the fraud, we regret that it was not uncovered sooner.”