Dusseldorf There must be a penalty: medium-sized or large corporations who do not publish their financial statements no later than twelve months after the end of the financial year are threatened with a fine. That’s what the Bundestag decided in 2007. Only: What is supposed to protect investors, suppliers and possibly even customers from unpleasant surprises has proven to be almost ineffective, especially in the case of financially strong start-ups.
After all, a defaulting company is only threatened with a fine above the usual maximum limit if it is “capital market oriented”, i.e. it usually gets money on the stock or bond market. The Federal Office of Justice (BfJ) only charges everyone else between 2,500 and 25,000 euros if you do not comply with the first reminder.
The Celonis case shows where the omissions lie. The Munich-based software start-up presented the barely meaningful individual financial statements for the short financial year 2017 as the last business figures. The latest round of funding now values Celonis, which canceled a planned IPO two years ago, at $13 billion. So there is enough money to afford a complete lack of transparency.
The comparatively low fines were recently accepted by 200,000 of the 1.4 million companies subject to disclosure, as reported by the BfJ. No wonder: together, the companies paid 99.6 million euros for their secrecy – on average, just 500 euros per omission.
Top jobs of the day
Find the best jobs now and
be notified by email.
Some even managed to cover up their financial difficulties for years – according to the Internet holiday broker Unister (“Ab-in-den Urlaub”, “Fluege.de”). The Leipzig start-up ended up in bankruptcy in 2016 after having kept its business figures secret for years.
>> Read also: Germany’s most valuable start-up, Celonis, is now valued at $13 billion
But apparently there is no sense of wrongdoing. Lobbyists of up-and-coming digital companies like to criticize the disclosure requirements, saying that they do not exist in the USA. The authorities there granted their start-ups pro-competitive relief. There is talk of “sandboxes”, “sandboxes” away from the rough business world to try out.
Germany’s start-up lobby likes to keep quiet about the fact that balance sheet falsifiers and investment fraudsters on the other side of the Atlantic face much higher claims for damages and prison sentences in return. Theranos founder Elisabeth Holmes, for example, faces 20 years in prison, Enron boss Jeffrey Skilling went behind bars for 12 years.
The legislature in Berlin must therefore do a lot more when it comes to transparency. Nothing less than Germany as a financial center is at stake.
More: A proud auditor finds himself at a loss for explanations