For 18 months, the Financial Times has reported on whistleblower allegations of accounting fraud at what was once Europe’s most valuable financial technology group: Wirecard. Since last Thursday, when the German payments company revealed auditors could not trace €1.9bn supposedly held in escrow accounts at two Asian banks, its shares have plunged 80 per cent. On Monday, Wirecard acknowledged that this cash probably does “ not exist”. It is now clear that this is one of Europe’s biggest corporate frauds of recent years.
From the outset, the instincts of the German authorities have been to investigate not the alleged transgressor but the messenger, and investors who, suspicious of Wirecard’s model, had shorted its shares. Journalists from this news organisation have faced not just a misinformation campaign from Wirecard but investigations and even criminal allegations from Germany’s financial regulator and prosecutors.
In a sophisticated global economy, no country is immune to fraud. Yet as Wirecard fights for survival it is time for a reckoning by the German corporate and political establishment: of how this case happened, and why regulators and criminal authorities took no action against it for a year and a half.