Deutsche Bank, EY Linked To Germany’s Wirecard Investigation
Deutsche Bank and its head of accounting Andreas Loetscher are now in the scope of the Wirecard investigation over Loetscher’s previous role at EY, the auditors of the disgraced payments company, according to Financial Times (FT).
Loetscher, in his previous role, was in charge of auditing Wirecard, FT writes.
Loetscher joined up with Deutsche Bank in 2018, following a 20-year career at EY. He is one of at least two Wirecard auditors being personally investigated by Apas, Germany’s audit oversight body, for potentially violating professional duties, FT reports.
Wirecard, once prominent in European payments, fell into scandal and then insolvency this year over the revelation of a missing EUR1.9 billion that the company said was in a Philippines bank, but then was revealed to potentially have never existed.
Alexander Geschonneck, a KPMG partner who led a special audit of Wirecard, said earlier this year that EY should’ve spotted the fraud earlier and it “wasn’t rocket science” that the special audit had been able to do so, FT writes.
Jens Zimmermann, an MP for the Social Democrats, said Deutsche Bank merited a look as well over past matters, and the fact that EY is now set to audit the lender in 2021, FT writes.
Apas has also recently said that EY may have acted criminally in the Wirecard case, according to a second FT story.
Sources familiar with the case are saying that Apas has sent a report to prosecutors with that information, making this the first time officials have said EY could actually be charged in the massive global case.
The concentration on EY comes from the fact that the firm audited Wirecard for over a decade and gave it clean bills of health every time, leading right up to the revelation of the scandal earlier this year.
EY is being pressured to testify on its role in the scandal, PYMNTS reports. Despite the company getting the green light to testify from Wirecard’s board, the auditor has balked at it thus far. EY has argued that the firm’s auditors could become exposed to potential criminal penalties related to security breaches.