German Govt. to cut ties with accounting watchdog after Wirecard €2bn fraud

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German Govt. to cut ties with accounting watchdog after Wirecard €2bn fraud

The German Government of Chancellor Angela Merkel has been exploring an option to terminate its contract with the bloc’s largest economy’s accounting watchdog following reveal of the havoc-scale fraud in Wirecard AG’s balance sheet between 2016 and 2018, regarding which the Wirecard’s London-based auditor was quoted saying earlier this week that a number of escrows related to the missing €2 billion from the German payment firms’ balance sheet that had never existed, were fabricated and the Europe’s second-largest fintech firm had been sending flawed documents to the relevant authorities alongside the German Securities and Exchange Commission since 2016, a Government official said on Sunday.

On top of that, earlier on Sunday, a German newspaper, Bild am Sonntag was quoted one of the sources as saying that the country’s Justice and Finance Ministries would cut the Government’s tie-up with the German financial forensic agency, FREP (Financial Reporting Enforcement Panel), a quasi-private organization accountable for supervising and analysing the financial statements of the publicly listed firms.

German Govt.

to terminate contracts with financial watchdog on Monday

Meanwhile, reaffirming the German newspaper Bild am Sonntag’s Sunday’s report, a Justice Ministry Official was quoted saying on condition of anonymity to a press agency late on the day, “We have reached an agreement with the Finance Ministry to terminate the contract,” however, neither the German Foreign Ministry nor FREP had commented over the issue while being asked.

As a matter of fact, the German payment processor, Wirecard AG, that was listed into the German blue-chip index DAX less than two years earlier, filed for bankruptcy on Thursday in a Munich court following reveal of a gaping hole of $4 billion at its balance sheets, among which roughly $2.1 billion had never existed as beforemtioned and the remaining amount the company was expecting to raise from its creditors over a pre-existing deal on last Friday, had been cancelled, as the German firm’s decade-long auditor EY had declined to sign off Wirecard’s 2019 balance sheet over the missing amount.