Ex-Wirecard CEO met senior Bundesbank official in 2019

ex wirecard ceo met senior bundesbank official in 2019 - Ex-Wirecard CEO met senior Bundesbank official in 2019
wirecard reuters - Ex-Wirecard CEO met senior Bundesbank official in 2019
The meeting the Wirecard CEO and a senior Bundesbank official draws the institution further into the fallout from Wirecard’s spectacular collapse in June, when it said that funds amounting to a quarter of its balance sheet probably don’t exist. — REUTERS

Former Wirecard AG Chief Executive Officer Markus Braun met with a senior Bundesbank official last year in the midst of allegations of accounting irregularities at the German payments company.

The Sept. 4 meeting between Mr. Braun and Burkhard Balz, a Bundesbank executive board member, was intended as a chance to “get to know each other and exchange views on digital developments in payment transactions,” Germany’s Finance Ministry said in a response to questions from a Green party lawmaker. The meeting was part of a growing effort by Mr. Braun to intensify contacts with German authorities.

The ministry’s response, which is based on information provided by the Bundesbank, doesn’t state whether the allegations of wrongdoing were discussed during the encounter at the central bank’s offices in Frankfurt. Still, the meeting draws the institution further into the fallout from Wirecard’s spectacular collapse in June, when it said that funds amounting to a quarter of its balance sheet probably don’t exist.

A Bundesbank spokesman declined to comment.

The ministry’s response does show that the Bundesbank was kept abreast of several developments regarding Wirecard at Germany’s top financial watchdog, BaFin. It also provides details on another key question: why German authorities didn’t classify Wirecard as a financial firm, which would subject it to closer scrutiny.

That’s likely to be in focus when the finance committee of Germany’s parliament grills officials including Bundesbank representatives at a special meeting on Sept. 1 in Berlin.

The Bundesbank and BaFin deemed in 2017 that not enough of Wirecard’s business was sufficiently financial in nature to merit a classification as a financial company, according to the document.

However, a division within Wirecard that housed its bank and certain other operations was deemed to be a financial holding company. Wirecard then explored an overhaul that would allow the intermediate holding company to shed that label, although Wirecard as a whole still wouldn’t have come under direct scrutiny, according to the ministry’s response.

Mr. Balz is responsible for payments, while banking supervision is the remit of a different board member at the Bundesbank. — Bloomberg

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