Wirecard inquiry: Germany’s political and financial elite exposed – Investors News Blog

wirecard-inquiry:-germany’s-political-and-financial-elite-exposed-–-investors-news-blog

21-04-21 10:45:00,

It was an innocuous question, posed shortly before midnight some nine hours into an exhausting parliamentary hearing into the Wirecard scandal.

“Did you ever actually own Wirecard shares?” Cansel Kiziltepe, the Social Democrat MP, asked Ralf Bose, head of Germany’s auditor watchdog Apas. His answer caused a political earthquake and brought an abrupt end to his more than 30-year career.

A former partner at KPMG, Bose ran a government agency that is normally protected from public scrutiny by stringent secrecy laws. But those laws do not apply to the Bundestag’s inquiry into Wirecard. Bose disclosed that he had bought and sold Wirecard stock while Apas was investigating Wirecard’s auditor EY. Just hours later the German government started to probe the transactions. And within a matter of weeks Bose had been fired.

His late-night admission last December was one of the high points of an inquiry that has electrified Berlin’s political class and has led to a swath of resignations among top regulators and financial executives.

“[With Bose] it was one of those moments when you knew there and then that this person would have to go,” says Matthias Hauer, one of the MPs leading the probe.

Markus Braun, former CEO of German Wirecard, is exercising his right to remain silent © Filip Singer/Getty Images

Constituted last October, the inquiry’s overriding objective is to find out why German regulators failed to spot one of the country’s worst ever cases of corporate fraud and take steps to prevent it — and to figure out how to stop it happening again. German authorities seemed blindsided when Wirecard announced last June that €1.9bn were missing from its accounts and days later collapsed into insolvency.

The inquiry reaches an emotional climax this week when MPs interrogate Germany’s two most powerful politicians — Angela Merkel, the veteran chancellor, and finance minister Olaf Scholz. Coming just five months before a national election — and at an extraordinarily fluid time in German politics — the encounters could shape the political debate for weeks to come.

MPs will want to know why Merkel lobbied for Wirecard in China when reports about suspected fraud at the company had been in the public domain for months. Scholz will be asked to explain how BaFin, the financial regulator he oversees,

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