German Lawmakers Question Scholz Role as Wirecard Inquiry Begins

(Bloomberg) -- German lawmakers sought to lay some of the blame on Finance Minister Olaf Scholz for the failure to detect wrongdoing at Wirecard AG, as a parliamentary inquiry into the collapse of the digital-payments company gets underway in Berlin.

Once lauded as a financial technology star, Wirecard filed for insolvency earlier this year after revealing that around $2.1 billion reported as cash on its balance sheet probably didn’t exist. The case exposed significant cracks in Germany’s financial oversight, as authorities failed to catch accounting issues despite ample warning.

Danyal Bayaz of the Greens party said that as finance minister Scholz -- who is running for chancellor for the Social Democrats, or SPD, in next year’s national election -- had “the tools, the mandate and the power” to step in once allegations of wrongdoing at Wirecard came to light in the media.

“I ask myself why he wasn’t more politically active,” Bayaz said Thursday in an interview with DLF radio. “It was at the very least negligent, and the finance minister has a personal, political responsibility for that.”

Fallout from the scandal has damaged Germany’s reputation as a financial center and the government is eager to push ahead with oversight reforms following criticism of regulator BaFin.

Scholz and Justice Minister Christine Lambrecht presented the government’s “Wirecard Action Plan” on Wednesday, which would give BaFin the right to assess all listed companies and conduct audits. It will also include a requirement for external auditors of listed companies to rotate after 10 years and force companies to hire separate firms for auditing and consulting.

Fabio De Masi of the Left party questioned whether Scholz and other officials had “done their jobs properly.”

“We want to see laws now and not just action plans,” De Masi said Thursday in an interview with ZDF television. Scholz’s reform proposals have “some sensible aspects,” he added, urging swift action.

Lawmakers want to know why Chancellor Angela Merkel lobbied on behalf of Wirecard on an official visit to China even after allegations about misconduct were widely known, De Masi said. They also want information about the company’s relationship with intelligence services, he added.

“Everyone is pointing the finger at everyone else and it seems that nobody was doing their job,” Bayaz told DLF. “It’s clear that there is a structural problem, and a suspicion that perhaps not enough attention was paid, and that needs to be explained.”

©2020 Bloomberg L.P.