The former Wirecard board member tried to change the report of the special test until the very end.
(Photo: dpa)
Munich According to the auditor KPMG, the former Wirecard board member around Markus Braun actually blocked a special examination of the allegations against the payment processor shortly before it went bankrupt.
Information about the questionable Asian business flowed “very, very slowly” for months, said KPMG board member Sven-Olaf Leitz on Thursday in the fraud process against Braun and two other managers.
The company even denied the auditors access to its current IT systems. “It was clear to us that the investigation had no purpose,” said Leitz, one of those responsible for the audit commissioned by the company itself.
He told Braun that KPMG had lost confidence in working with Wirecard. He then threatened the examiners with legal action and tried to put them under pressure.
In the special investigation initiated by Wirecard itself, the auditors had not found any evidence of the existence of trust accounts in Asia allegedly worth billions. That was the beginning of the end for Wirecard, which had to file for bankruptcy in June 2020.
The public prosecutor, like the insolvency administrator, assumes that the business – which, according to Leitz, accounted for more than 90 percent of Wirecard’s reported profits from 2016 to 2018 – never existed. Braun, on the other hand, also insists in court that the third-party business existed and that the proceeds were only set aside.
“Who else would have the money?”
Until the end, Braun tried to change the preliminary report of the auditors and to reinterpret the results, said Leitz. In the final meeting he said: “You couldn’t prove to us that we didn’t have the money.”
Jan Marsalek, the board member responsible for the Asian business and who has fled since the bankruptcy, who Leitz says he saw for the first time at the meeting, asked, alluding to the former North Korean dictator: “Who else should have the money? Kim Jong Il or who?”
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Braun also presented the results of the KPMG investigation in a distorted manner in an ad hoc announcement to investors. “The content was not acceptable for us,” said Leitz. He tried to make that clear to him in writing and in a telephone call and also informed the chairman of the supervisory board, Thomas Eichelmann. Braun told him that he took the message “on his cap”. The public prosecutor’s office accuses the ex-CEO of fraud and misleading the capital market.
In the special audit, the auditors wanted to understand how the money from the customers of the retailers who processed their transactions through alleged third-party partners of Wirecard flowed into the Wirecard systems. The “Financial Times” had raised doubts that there were transactions that Wirecard booked as sales and for which the processor collected commissions.
The proceeds were supposed to end up in an escrow account in Singapore and later in Manila, Philippines, which reportedly totaled 1.9 billion euros. “The question for me was: Does the money exist and where is the money?” said Leitz. Wirecard rejected his suggestion to transfer the entire amount to a German account as proof.
Wirecard made it difficult for the examiners and delivered the required documents late or not at all. There were no contracts with dealers, transaction data from the three years were no longer available and the cash flows were not traceable, said the KPMG auditor. “We had an investigation obstacle. Everything you would normally need to prove the existence of revenue was missing.”
According to Wirecard, the dealers did not want to get in touch with the auditors, and there were no balance sheets from the alleged Wirecard partners. Instead, the head of Wirecard’s compliance department pushed for parts of the KPMG team to be replaced. “There were several attempts to influence us,” said Leitz.
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