German Chancellor Angela Merkel says she knew nothing about the significant fraud at bankrupt fintech company Wirecard before the scandal became known in June last year.
She had previously promoted Wirecard on a trip to China. But nothing should be sought behind that, she emphasized before a parliamentary committee on Friday. Merkel says it is normal for the German government to defend the interests of German companies when traveling abroad.
Merkel is being questioned by the parliamentary committee that is investigating the billion-dollar fraud in Germany. The aim is to find out what the government knew and when. The affair has caused quite a stir, all the more since research has shown that there were contacts between Wirecard, former employees of the German intelligence services, and the highest government circles.
Wirecard was seen as a German success story. After reports of financial malpractice at the company for several years, Wirecard admitted last June that several billion euros were missing and probably never existed. Three days later, the financial concern was bankrupt. Even though there had already been indications that things were not right at Wirecard, both accountants and regulators did not or hardly responded.
German Finance Minister Olaf Scholz was also interrogated this week. He then declined all responsibility for the company’s collapse. According to Scholz, the company and the accountants are responsible for the fraud. “This fraud has not been discovered for eleven years because the accountants who had to assess the financial situation always approved the books,” said Scholz.
Parliamentarians believed that Scholz had political responsibility because the German financial regulator BaFin falls under his ministry. He also failed to take action even though there were indications of fraud.
The Wirecard scandal cost the head of the German financial regulator BaFin all his job. That watchdog will also be reorganized under a new top executive.