German Regulator Had Just 1 Person Checking Wirecard’s $3.1B Books: Report
Germany’s accounting watchdog reportedly had only one person checking Wirecard’s books in the months before the company admitted to the massive accounting irregularities that led to its insolvency.
- Sources speaking to Reuters on Thursday said Germany’s chief financial regulator, BaFin, had assigned only one staff member at the Financial Reporting Enforcement Panel (FREP) to report on Wirecard’s books in 2019.
- FREP is a privately owned agency with a contract with BaFin.
- Wirecard claimed in February that it had earned revenue upwards of €2.8 billion (~$3.1 billion) in 2019.
- On June 18, the Munich-based company admitted that some of its employees had purposefully inflated revenue, resulting in an estimated $2.1 billion black hole.
- FREP’s report had not been published by that point and has still not been made public.
- The private agency had previously assured BaFin that it had investigated Wirecard as far as it could, Reuters said.
- A spokesperson said Wednesday that it was not FREP’s responsibility to investigate accounting fraud.
- BaFin has since confirmed it will be canceling its contract with FREP.
- On June 23, Wirecard’s former CEO Markus Braun was arrested on suspicion of accounting fraud and market manipulation.
- The collapse of Wirecard meant cryptocurrency firms TenX and Crypto.com cards temporarily stopped working; they were reactivated earlier this week.
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