Popcorn Days: Wirecard Trial Starts With Open Questions About Its Shadow Structure!

The Wirecard trial begins on 8 Dec 2022. The main question will be: Who is responsible for the scandal? Markus Braun, the founder and former CEO, Oliver Bellenhaus, managing director of Wirecard Dubai, and the former head of accounting, Stephan von Erffa have to answer critical questions! Braun and his accomplices are alleged to have operated Wirecard as a criminal organization, the indictment says. The court has scheduled 100 days of hearings. In an underground courtroom.

Trial Key Data

The Accusations & The Trial

At the core of the indictment is the so-called third-party acquiring business (TPA) of Wirecard. In its financial statements, the TPA business showed €1.9 billion in cash tied up in escrow accounts. In October 2019, the Financial Times exposed that large parts of the TPA business appeared fraudulent. It turned out that the respective bank statements were forgeries. The escrow accounts and billions in cash did not exist.

The three defendants will be facing charges of fraud, embezzlement, and accounting and market manipulation in a trial that is expected to continue into at least 2024. The public prosecutor’s office in Munich accuses the defendants of misrepresenting Wirecard‘s financial statements since 2015. Like all criminal court proceedings in Germany, the Wirecard case will not be decided by a jury but by a panel of three professional judges headed by presiding judge Markus Foedisch and two “lay” judges, members of the public who are deputized for the duration of the trial.

Three prosecutors led by Matthias Buehring will represent the German state. Prosecutors expect that reading out all the charges will take about five hours.

The Defendants’ Strategy

Braun and Bellenhaus have been in pre-trial custody for two and a half years. In different correction facilities. While Bellenhaus has been housed in the Stadelheim correctional facility from the beginning, Braun has only recently been transferred to Stadelheim from another German correctional facility. The prosecutors wanted to ensure that the two men did not meet again until they were in the courtroom.

According to his defense, ex-CEO Markus Braun still sees himself as a victim of a racket around the fugitive ex-COO Jan Marsalek and Oliver Bellenhaus. He argues that thy created a “shadow structure” and redirected the TPA proceeds into their own pockets, without his knowledge.

Oliver Bellenhaus is considered a key witness. His lawyer Florian Eder says: “He played a part in the Wirecard system. He has accordingly also brought guilt upon himself. It was just a closed caste, and he will make that relatively clear again in the first days of the trial.”

Stephan von Erffa was released on bail in the summer of 2021. He will remain silent “for now,” according to his lawyer. However, he allegedly admits to falsifying documents from Wirecard requested by KPMG as part of a special audit.

What About The Genesis Of The Wirecard Shadow Structure?

From FinTelegram’s perspective, the indictment is based on a false image of Wirecard. It only considers the period after 2015 with a focus on Asia. However, the genesis of Wirecard, its TPA business, and its “Shadow Structure” lies in the early years before 2010, when current Payabl. owners and managers Ruediger Trautmann and Dietmar Knoechelmann, as top executives of Wirecard, were the driving forces in building the shadow organization around Wirecard. The two made a lot of money selling “questionable”fishy” companies and/or transaction volumes to Wirecard. Even after their departure and after 2010, Knoechelmann and Trautmann had a massive influence on Wirecard’s business, short-seller Fraser Perring alleges.

Their companies such as Gateway Payment Solutions, PowerCash21, and Inatec, laid the foundation of Wirecard‘s shadow organization. PowerCash21 and Inatec merged into the Payabl Group,

It will be interesting to see if and how this early period comes up in the 100 days of the trial.