German watchdog chief calls Wirecard scandal a ‘massive criminal act’

Wirecard AG

The head of Germany’s financial watchdog has called the accounting scandal at Wirecard “a massive criminal act”, while the country’s premier financial institution Deutsche Bank said it was considering support for the collapsed payments company’s banking unit.

The comments from BaFin president Felix Hufeld are his most outspoken yet about Wirecard, which last week filed for insolvency owing creditors almost $4 billion after disclosing a 1.9 billion euro (approximately $2.1 billion) hole in its accounts that auditor EY said was the result of a sophisticated global fraud.

“It is plain vanilla, old-fashioned criminal behaviour,” Hufeld said in an online panel discussion.

BaFin, which oversaw Wirecard’s banking subsidiary, has defended its role after taking much of the flak so far for the scandal.

Germany’s largest bank said it was working with BaFin and Wirecard’s insolvency administrator on the possible support for Wirecard Bank.

“We are in principle prepared to provide this support in the context of a continuation of business operations, if such assistance should become necessary,” Deutsche Bank said.

Wirecard’s insolvency manager Michael Jaffe said that Wirecard Bank continued to operate, but six German subsidiaries of Wirecard have also applied for insolvency proceedings.

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“Wirecard Bank AG is not insolvent. Payouts to merchants and customers of Wirecard Bank are being executed without restrictions”, Mr Jaffe said in a statement.

Meanwhile, some of Wirecard’s customers and partners are breaking ties.

Discount supermarket chain Aldi Sued, a major customer, said that Wirecard was no longer processing its credit card payments as of the 1st of July.

The team at Platform Executive hope you have enjoyed the ‘German watchdog chief calls Wirecard scandal a ‘massive criminal act’‘ article. Automatic translation from English to a growing list of languages via Google AI Cloud Translation. Initial reporting via our official content partners at Thomson Reuters. Reporting Hans Seidenstuecker and Tom Sims. Additional reporting by Matthias Inverardi in Duesseldorf. Editing by Thomas Seythal, Mark Potter, Susan Fenton.

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