Deutsche Bank Accounting Head Is Aim of Wirecard Complaint
Deutsche Bank’s Accounting Head Is Target of Wirecard Complaint
(Bloomberg) -- Deutsche Bank AG’s top accounting executive, Andreas Loetscher, and two ex-colleagues at his former firm Ernst & Young were targeted in a criminal complaint by a German retail investor association for their alleged role in the accounting scandal at Wirecard AG.
The SdK association filed the claim against two unnnamed current partners of EY -- which also audits Deutsche Bank’s accounts -- and one former partner because of “the events around Wirecard,” according to a statement on Friday. That ex-partner is Loetscher, a person familiar with the matter said.
Loetscher, a two-decade veteran at the accounting firm, oversaw the Wirecard audits for the financial years 2015 through 2017, filings show. He left in 2018 to become chief accounting officer at Deutsche Bank, taking over after the bank struggled for years with legal and regulatory mishaps.
”There are many unresolved questions around Wirecard,” Deutsche Bank said in a statement. “We highly appreciate working with Andreas Loetscher.” The principle of presumption of innocence applies, the bank also said. Loetscher declined to comment through a spokesman and EY declined to comment on the complaint.
Prosecutors now have to review the complaint and decide whether the facts warrant a criminal investigation. They can also use evidence collected as part of a probe into Wirecard itself.
‘Worrisome Case’
Wirecard filed for insolvency Thursday, the culmination of a stunning accounting scandal that led to the arrest of its former CEO and the revelation that over $2 billion on its balance sheet likely didn’t exist. The scandal has prompted questions about the the role of the auditors and Germany’s financial regulator.
Wirecard is a “a worrisome case,” Steffen Seibert, the spokesman for German Chancellor Angela Merkel, said during a news conference on Friday. The reaction by authorities now is “about preventing damage to Germany as a financial industry location,” he said.
EY accused their client of “an elaborate and sophisticated fraud” that allowed more than $2 billion to go missing. The firm finally sounded the alarm last week, when they refused to sign off on Wirecard’s 2019 financial report.
Loetscher is just one link between Wirecard and Deutsche Bank.
Germany’s largest lender has loaned money to both Wirecard and Braun and it also served as global coordinator on the company’s bond issue last year. The bank also led on its share sale in 2014. DWS, Deutsche Bank’s asset-management unit, was briefly one of Wirecard’s biggest shareholders earlier this year.
Braun has served one of the bank’s regional advisory boards.
Wirecard even toyed with a tie-up with Deutsche Bank and approached the lender with the idea, people familiar with the matter previously said.
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