Ex-Wirecard boss goes on trial for fraud

Ex-Wirecard boss goes on trial for fraud

MUNICH — The trial begins on Thursday of the former Wirecard chief executive who steered the payments company through its rise and spectacular collapse two years ago in a fraud scandal that shook German politics and tarnished the country’s business reputation.

The 53-year-old former chief executive officer Markus Braun, who has been in custody since his arrest in 2020, and two other managers of the defunct blue chip firm face charges including fraud and market manipulation.

They could be jailed for up to 15 years if convicted.

Mr. Braun has denied embezzling money from Wirecard and accused others of running a shadow operation without his knowledge.

He will appear in Munich’s largest and newest courtroom, a bomb-proof underground hall built in the Stadelheim prison complex that is also intended to try terror suspects. A verdict is not expected before 2024 at the earliest.

Founded in 1999 and based in the Munich suburb of Aschheim, Wirecard’s fairy-tale rise transformed it from a payment processor for pornography and online gambling to a showpiece for a new type of German tech company that could compete with the established titans of Europe’s largest economy.

It displaced Commerzbank in Germany’s DAX blue-chip index and at one point was worth $28 billion, but its demise embarrassed the Germany establishment, placing politicians who backed the company and regulators who took years to investigate it under scrutiny.

After batting away suspicions of wrongdoing from investors and journalists and successfully lobbying the German authorities to investigate those who were scrutinizing its finances instead, Wirecard was forced to admit in June 2020 that €1.9 billion were missing from its balance sheet.

The prosecution has said Wirecard’s management invented vast sums of phantom revenue to hoodwink investors and creditors.

The government of then Chancellor Angela Merkel, which had previously backed Wirecard’s pursuit of an acquisition in China, briefly considered bailing out the company.

However, within days, Wirecard became the first-ever DAX member to file for insolvency, owing creditors nearly $4 billion.

EVIDENCEProsecutors will draw on evidence from Braun’s co-defendant Oliver Bellenhaus, the former head of Wirecard’s subsidiary in Dubai, who became a key witness after turning himself in to the German authorities in 2020.

Another former executive, Stephan von Erffa, is also on trial. He has publicly expressed regret about the events at Wirecard but denied orchestrating them. His lawyer said von Erffa did not want to comment on the charges.

A key suspect, Wirecard’s former chief operating officer Jan Marsalek, is an international fugitive whose whereabouts are unknown.

Following Wirecard’s demise, the head of German financial regulator BaFin resigned and the head of Germany’s accounting watchdog also stepped down.

There are 100 court dates provisionally scheduled until the end of next year in the case. — Reuters