Merkel Received Incomplete Information on Wirecard From Ministry

Germany’s finance ministry provided Angela Merkel’s office with selective information about Wirecard AG which implied that the payments company was a victim of manipulation, according to an internal email exchange seen by Bloomberg.

Ahead of Merkel’s trip to China in late 2019, when she lobbied on behalf of Wirecard, the ministry provided little information on apparent wrongdoing by the company, such as critical reports in the Financial Times newspaper or details of an official investigation of the allegations.

Instead, in its response to the chancellery’s information request, it singled out reports about how a private detective taped a conversation which Wirecard said proved that the FT and short-sellers were jointly conspiring against it. It also referred to a controversial ban by Germany’s financial regulator BaFin on the short-selling of Wirecard stock, which appeared to benefit the company.

Wirecard’s crash last year from rising star to national disgrace was Germany’s biggest financial scandal in recent memory, and led to BaFin’s top leadership resigning and a parliamentary probe in Berlin. Deputy Finance Minister Joerg Kukies is due to face lawmakers’ questions later on Wednesday, when he will be asked about the ministry’s handling of the scandal. Merkel and Finance Minister Olaf Scholz will testify later this week.

Lawmakers want to know why Merkel lobbied for Wirecard in China, even after allegations of wrongdoing at the company had long been circulating in the media. Wirecard revealed in June last year that 1.9 billion euros ($2.3 billion) it had reported as assets probably never existed, rattling Germany’s finance industry and damaging the country’s reputation.

Merkel Received Incomplete Information on Wirecard From Ministry

Asked to comment for this article, a finance ministry spokeswoman said the ministry pointed the chancellery toward allegations of wrongdoing at Wirecard in August 2019. The information included responses to questions raised in parliament about the payments company, the spokeswoman said by email.

The chancellery requested only general information about Wirecard, and did not say why it wanted it or mention Merkel’s planned China visit, according to a person familiar with the matter, who asked not to be identified discussing confidential information.

Merkel’s economic adviser, Lars-Hendrik Roeller, told the parliamentary investigation committee in January that the chancellery had no information about apparent irregularities at Wirecard at the time his team planned Merkel’s trip. He said he hadn’t read the FT articles published in early 2019 that helped uncover the scandal and his team was relying on the finance ministry and BaFin to keep it informed.

Danyal Bayaz, a Bundestag lawmaker for the Greens party and a member of the Wirecard inquiry, told Bloomberg that neither the chancellery nor the finance ministry “did their job properly in the Wirecard case.”

“It is not appropriate to promote a company abroad on the basis of superficial information from lobbyists,” Bayaz said. “It is equally inappropriate to conceal important information in the responsible ministry of finance for an important trip abroad by the chancellor,” he added.

The finance ministry asked BaFin to limit the information on Wirecard provided to the chancellery to what was publicly available, according to a separate email exchange.

As a result, BaFin didn’t mention an investigation by the Financial Reporting Enforcement Panel, or DPR, which looked into the FT’s allegations of Wirecard accounting fraud. The DPR is appointed by the government but privately run.

The finance ministry also gave BaFin an assurance that it would pass on the information it had provided to the chancellery without any changes or comment.

BaFin’s decision to ban short-selling in Wirecard stock prompted accusations that it was trying to protect the company while failing to investigate alleged wrongdoing. BaFin rejects that view, saying it had to protect the wider market.

A BaFin spokesman declined to comment for this article. The chancellery did not immediately respond to a request for comment.

©2021 Bloomberg L.P.

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