Germany poised for Wirecard parliamentary inquiry

Germany is poised to launch a full parliamentary inquiry into the collapse of payments provider Wirecard, as questions mount on how the government failed to prevent the country’s biggest post-war financial scandal.

After grilling members of Chancellor Angela Merkel’s Cabinet behind closed doors, opposition lawmakers on parliament’s finance committee said they have no choice but to up the ante and seek a full inquiry.

“Despite the many special meetings, we have not managed to clear up the scandal,” said Green Party business spokesman Danyal Bayaz after a hearing on Tuesday, September 1.

There had been “human errors, systemic errors, but also political errors” in the government’s dealings with the company, he said.

A quarter of the 709-member lower house must agree to set up the inquiry.

With the Green party on board, the liberal FDP, far-left Linke party, and far-right AfD combined would have enough votes to seek the hearing before the Bundestag.

Digital payments provider Wirecard, once a rising star in the booming fintech sector, collapsed spectacularly in June after the company was forced to admit a 1.9-billion-euro ($2.3-billion) hole in its balance sheet.

The company’s former chief executive officer Markus Braun and several other top executives have since been arrested on fraud charges.

Last month, it was kicked out of Germany’s blue-chip DAX index after its share price fell 99% in the year to date.

The scandal is proving embarrassing for Merkel’s right-left coalition in the lead-up to next year’s general election. 

At a press conference last week, Merkel herself had to defend promoting the company in China in 2019.

Finance Minister Olaf Scholz, the center-left Social Democrats’ candidate to succeed Merkel at the 2021 polls, will also come under pressure as his ministry supervises the financial regulator BaFin. 

Fabio de Masi, lawmaker for the left-wing Die Linke party, argued for small investors who had lost savings due to the stock market crash of the former Dax company. “We owe it to these people to shed light on the whole issue,” he said.

Robert Habeck, co-president of the Green party, said, “We need clarity on what happened, why the supervisor failed, and how financial supervision can be better organized in the future.” – Rappler.com