The Munich I Regional Court admitted the Wirecard indictment. In the 474-page indictment, the prosecution accuses Markus Braun, his Chief Financial Officer Stephan von Erffa, and the former Wirecard representative in Dubai, Oliver Bellenhaus, of balance sheet falsification, market manipulation, breach of trust in several cases, and commercial gang fraud. They allegedly falsified Wirecard balance sheets from 2015, damaging lending banks by a total of €3.1 billion.
The Indictment
The DAX-listed Wirecard had a market capitalization of more than €20 billion in 2018 at its peak. In June 2020, the Wirecard scheme collapsed. The Austrian ex-CEO Markus Braun, who has been in pre-trial detention for more than two years, has in the past protested his innocence and denied the allegations.
The public prosecutor’s office alleges that the defendants invented extremely profitable businesses so that Wirecard would be perceived as an extremely successful company. Reported revenues had not existed at all. The consolidated financial statements from 2015 to 2018 were false and misrepresented the group’s circumstances. The maximum possible sentence for aggravated fraud is ten years imprisonment, but Braun’s pre-trial detention will count towards this. In addition, part of the sentence is likely to be suspended in the event of good behavior. Markus Braun could therefore be released from prison after 3 to 4 years if convicted.
The German Disgrace
The Wirecard collapse was also the result of research by short seller Fraser Perring, who in 2016 highlighted numerous inconsistencies in the Wirecard scheme in his Zatarra Report. After that, the Financial Times took a critical look at German FinTech and disclosed accounting issues around Wirecard and its satellite companies. In the end, €1.9 billion was missing.
Wirecard is also a disgrace to the German BaFin and the German public prosecutor’s office. Instead of investigating the public allegations made by Perring and the Financial Times, BaFin decided to look the other way, and German prosecutors took action against Perring and the Financial Times journalists.
So Many Questions
The fact is that there is still a great deal that is not yet known about the Wirecard scheme. From our point of view, it is completely naive to assume that Markus Braun and his fugitive ex-colleague Jan Marsalek would have been able to run such a gigantic scheme without the involvement of others. The people responsible for the satellite companies must also have been involved.
Just a few days ago, German media published an analysis suggesting that Wirecard, with its satellite companies, may indeed have been a giant money laundering machine.
We will continue to work on the exposure of the Wirecard scheme and its legacy in parallel to the upcoming trial.
