Finance

Wirecard scandal casts a shadow on governance

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The Wirecard logo is seen at the payment company’s headquarters in Aschheim near Munich, southern Germany, on June 24, 2020.

Christof Stache | AFP via Getty Images

Wirecard’s dramatic fall from grace has thrust corporate governance and industry regulation in Germany firmly in the spotlight.

The Munich-based payments processor filed for insolvency on Thursday, reportedly owing creditors 3.5 billion euros ($3.9 billion). The company’s collapse follows a series of investigative reports from the Financial Times into claims about accounting irregularities.

The revelation last week that 1.9 billion euros had disappeared from Wirecard’s balance sheet has seen the firm’s share price collapse 98% and former CEO Markus Braun arrested on suspicion of falsifying accounts.

The Wirecard saga and its broader implications raises many questions, with some experts describing the scandal as the “Enron of Germany.”

Governance

Under German corporate law, companies are required to have both a supervisory board and a management board. The supervisory board is responsible for overseeing management.

Chris Hohn, the head of $24…



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https://www.cnbc.com/2020/06/29/enron-of-germany-wirecard-scandal-casts-a-shadow-on-governance.html

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