German Chancellor Angela Merkel has defended her lobbying for Wirecard during a 2019 visit to China, telling a parliamentary committee that the payments company received no special treatment and that it was in Germany’s interest to promote its businesses.
Mrs Merkel said Wirecard’s aim of entering the Chinese market overlapped with the best interests of the German economy as a whole.
The company later collapsed in an accounting scandal.
‘Despite all the press reports, there was no reason to assume serious irregularities at Wirecard’ at the time of the China trip, German news agency dpa quoted the chancellor as telling the committee.
Merkel’s appearance marked the climax of a public inquiry into an affair that has tainted Germany‘s reputation for rectitude, exposed ties between politics and business and prompted resignations and criminal investigations.
The government has said that Merkel did not know at the time of the irregularities at Wirecard, which has since been dismantled after its disclosure of a 1.9billion euro (£1.6billion) financial hole triggered its insolvency.
German Chancellor Angela Merkel has defended her lobbying for Wirecard during a 2019 visit to China
Merkel told a parliamentary committee that the payments company received no special treatment and that it was in Germany’s interest to promote its businesses on Thursday
Wirecard, which began by processing payments for gambling and pornography, had been hailed as a rare German technology success story, although few really understood it.
The company filed for protection from creditors through insolvency proceedings in June after admitting that 1.9 billion euros (£1.65 billion) supposedly held in trust accounts in the Philippines probably did not exist.
Prosecutors in Munich are investigating the company’s former chief executive, Markus Braun, on suspicion of criminal fraud.
Lawmakers say that the German government was biased in favour of the company, turning a blind eye to allegations of irregularities in the run up to its collapse.
Prosecutors in Munich are investigating the company’s former chief executive, Markus Braun (pictured), on suspicion of criminal fraud
Finance minister Olaf Scholz appeared before the committee on Thursday. He denied any responsibility on his or the government’s part for failures of oversight
Minister Scholz also rejected suggestions that German regulators or the Finance Ministry, which oversees them, protected Wirecard
Parliamentarians are believed to have asked Merkel why she brought up Wirecard’s planned takeover of a company in China during a state visit in September 2019 and why a senior official in her office had also pledged further support for Wirecard.
Asked about a meeting ahead of the China visit with Karl-Theodor zu Guttenberg, a former defence minister whose firm advised Wirecard, Mrs Merkel said she could not remember if Mr Guttenberg had specifically named Wirecard.
Finance minister Olaf Scholz appeared before the committee on Thursday. He denied any responsibility on his or the government’s part for failures of oversight.
He also rejected suggestions that German regulators or the Finance Ministry, which oversees them, protected Wirecard. But he conceded that the regulatory structure had not been set up well enough for such a case.
Lawmakers say that the German government was biased in favour of the company, turning a blind eye to allegations of irregularities in the run up to its collapse
Wirecard, which began by processing payments for gambling and pornography, had been hailed as a rare German technology success story
‘The Chancellor lobbied for Wirecard with the most powerful man in China,’ said Fabio De Masi, one of the lawmakers leading the public inquiry, asking why she gave it such priority.
In power since 2005, Merkel remains popular, although her legacy, such as her 2015 decision to open Germany’s borders to refugees fleeing war in the Middle East, divided opinion.
The Wirecard debacle tarnished her government’s reputation by shining a spotlight on the lengths some German politicians have gone to in order to support companies.
Stephan Klaus Ohme of Transparency International said had it exposed cracks in Germany’s laissez-faire model towards industry, leaving companies largely to their own devices.
‘In Germany, you should stick to the rules but if you don’t, nothing happens. The penalties are laughable,’ he added.
The Wirecard debacle tarnished Merkel’s government’s reputation by shining a spotlight on the lengths some German politicians have gone to in order to support companies
Stephan Klaus Ohme of Transparency International said had it exposed cracks in Germany’s laissez-faire model towards industry, leaving companies largely to their own devices