By Elizabeth Hearst
The German Parliament will open a full inquiry into the German payments processor Wirecard as the German government grapples with one of the world’s largest corporate fraud scandals.
The decision comes amid MPs questioning of German authorities’ handling of the situation and why the relevant bodies failed to detect the massive fraud. Opposition MPs laid claim that German authorities have failed to properly investigate financial irregularities at the company.
Questions have also been raised in relation to Angela Merkel’s lobbying for the German company on an official trip to China last year, during which claims of financial inconsistencies relating to the payment processor had already been circulated, as reported by the Financial Times.
Similarly, the finance minister, Olaf Scholz, whose ministry oversees the German financial markets watchdog BaFin and the country’s Financial Intelligence Unit, are likely to come under fire for his lack of diligence. Both Scholz and Merkel are accused of ignoring warning signals in relation to Wirecard. Scholz is set to replace Merkel as Chancellor after Germany’s general election next year.
The inquiry comes after the company filed for insolvency in June after it emerged that there was a €1.9 Billion euro hole in the company’s accounts. The CEO Markus Braun has since been arrested in relation to the scandal which has resulted in the company collapsing under €3.5 Billion in debt.
The German parliament has launched an inquiry into the company following a number of hearings which took place in July. Fabio De Masi, MP for the Die-Linke party said: “An investigative committee is inevitable in order to acquire full access to the files… There are still open questions which concern the chancellor’s lobbying for Wirecard in China, the role of the financial watchdog and of the law enforcement authorities and regional government in Bavaria”.
Similarly Green MP, Danyal Bayaz added: “There are still a lot of questions and lots of inconsistencies. That’s why we need an investigative committee, with a clear mission.” He said that this inquiry gave the German government a “chance to win back the trust of investors that had been lost” due to the scandal.
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