Wirecard enjoyed ‘no special treatment’, Merkel says

Investing

Angela Merkel, the German chancellor, has defended her lobbying for Wirecard in China in 2019, saying there was “no reason to assume” at the time there were serious irregularities at the fraudulent payment company.

Merkel was speaking to a Bundestag inquiry investigating how Germany’s politicians and financial regulators failed to detect one of the worst cases of fraud in Germany’s postwar history. Merkel’s testimony forms the climax of the six-month probe.

In her opening statement, she said her government regularly lobbied for the economic interests of German companies abroad and Wirecard was no exception. But she denied that Wirecard had enjoyed “special treatment” on the visit to China. “The fact that [it] was discussed in China had its logic,” she said.

“Despite all the press reports there was no reason at the time to assume there were serious irregularities at Wirecard,” she said. She insisted she had followed neither the “negative nor the positive” press coverage of the company, but said there were plenty of people who thought at the time that Wirecard was a “really great technology company”.

You Might Like

But opposition MPs said that considering the volume of critical reporting in 2019, the chancellor should have steered clear of Wirecard. Merkel “did not cover herself with glory,” said Danyal Bayaz of the Greens. “She promoted the interests of a criminal enterprise in China.”

At the time of Merkel’s China trip, Wirecard was trying to enter China by acquiring the Chinese payments company AllScore Financial. To seal the deal it required the approval of the Chinese regulator, the People’s Bank of China. Merkel raised the issue with her Chinese interlocutors during her trip.

She said Wirecard’s push to break into the Chinese market “fitted” Berlin’s strategy of trying to open up the Chinese financial services sector.

Wirecard announced last June that €1.9bn was missing from its accounts and soon afterwards collapsed into insolvency. Prosecutors in Munich accuse its former chief executive, Markus Braun, of having run a criminal racket that conducted “fraud in the billions”. Braun, who has been in police custody since last summer, denies wrongdoing.

Merkel said the Wirecard affair was a “slap in the face of hundreds and thousands of honest businessmen” in Germany.

She was speaking to MPs a day after finance minister Olaf Scholz appeared before the inquiry. He has come under particular scrutiny over his role as overseer of financial regulator BaFin, which has been criticised for failing to prosecute Wirecard and for going after the FT reporters and short-sellers who uncovered irregularities in the company’s accounting practices instead.

In their questioning of Merkel, MPs focused on a meeting she held with her former defence minister Karl-Theodor zu Guttenberg, now the chair of advisory firm Spitzberg Partners, on September 3 2019, a few days before the China trip. Guttenberg, who was advising Wirecard at the time, brought up its acquisition of AllScore Financial and asked the chancellor for help.

Merkel said she couldn’t remember that Wirecard was mentioned at the meeting. She said she had passed the matter on to experts in the chancellery’s economic department, led by her senior adviser, Lars-Hendrik Röller.

Merkel defended her decision to meet Guttenberg, saying that she agreed to requests for personal meetings from former government ministers as a “matter of course”.

But under questioning she expressed frustration at the conversation, saying “I don’t particularly appreciate it” when former colleagues use personal conversations with her to “make certain requests”.

“We need strict, clear rules to prevent situations in the future where chancellors are recruited for lobby interests,” said Bayaz, the Green MP. 

Röller has also come under scrutiny over an email which MPs said showed his wife had tried to set up business contacts for Wirecard in China. Merkel said she had no reason to doubt Röller’s “loyalty and integrity”.

Articles You May Like

The $12,000-a-day house in Provence that toxic assets built
Coinbase crypto exchange to close San Francisco headquarters in 2022
Kairi Relative Index: The Forgotten Oscillator
Cronos Group 1Q Profit And Revenue Miss Estimates; Shares Up 4%
Biden’s tentative steps towards North Korea’s Kim greeted with scepticism

Leave a Reply

Your email address will not be published. Required fields are marked *