Could Wirecard have been exposed earlier? – Business

Commerzbank has long been one of Wirecard’s most loyal supporters. In the spring of 2018, Germany’s second largest private bank even organized a 1.75 billion euro loan from 15 banks, to which it contributed 200 million. When Wirecard went bankrupt in 2020, the money was gone. Not only authorities and auditors have failed: Wirecard might have been caught earlier if the banks had also seriously followed up warnings.

On the right track

The fraud department at Commerzbank was on the right track in 2018: Among other things, they were suspicious of a transaction by Wirecard in 2015. At that time, an Indian sold his company to a newly founded fund in Mauritius for 35 million euros, after previously having been on the Wirecard board Jan Marsalek had contact. The fund, in turn, sold the company to Wirecard about four weeks later for 315 million euros – a highly unusual increase in value. When the matter became known shortly before the loan was granted in 2018, Commerzbank suspected that the fund in Mauritius was used for the self-enrichment of Wirecard management. The bank called in its fraud department to investigate. She asked Wirecard; Discussions even followed at management level, but Wirecard played it down, the loan was approved, including by Marcus Chromik, Chief Risk Officer. In the parliamentary committee of inquiry that dealt with the bankruptcy, he later said that the credit had been granted and that further analyzes by the fraud department were no longer “credit material”.

porn and gambling

Consciously acting with integrity: That was what Commerzbank’s code of conduct stipulated when it granted the loan. Even then there were indications that Wirecard was involved in porn financing and gambling. Apparently, that didn’t deter the bank. Why not? Commerzbank did not want to comment on this, it was also “no violation of internal regulations recognizable”.

looked away

Banks are required to carefully screen their borrowers. It is therefore customary, although not mandatory, for financial institutions to ask companies to inspect the so-called audit report. In these non-public reports, examiners explain their work and often contain valuable pointers to difficulties. But at Wirecard of all places Commerzbank waived like most other banks also on inspection of the report, relied on attestation and rating. According to statements made by the committee of inquiry, the auditors have at least pointed out irregularities in their reports since 2015. Why didn’t the institute take a deeper look at Wirecard of all places? The bank was not obliged to do so, it said at the general meeting.

Alarming tone

Even after the loan was granted in spring 2018, the bank’s fraud department did not give up. In February 2019, she found what she was looking for, and the money house sent the responsible authorities in an “alarming tone” – according to the responsible public prosecutor in Munich – 345 cases of suspected money laundering about payments from Wirecard totaling 356 million euros. Period: August 2012 to January 2019. Commerzbank, as the correspondent bank of Wirecard Bank, had passed these payments on to group subsidiaries, among others. The prosecutor identified the suspicious reports later found to be extremely helpful in the investigation. Just: Why did the suspicious payments by Commerzbank’s anti-money laundering measures only appear in 2019, and what does that say about the bank’s control mechanisms? The money house does not want to comment on this on request.

eaten out

After all: According to Chromik, Chief Risk Officer, the suspicious reports led to the board of directors deciding at the beginning of 2019 to end the business relationship and thus also the credit connection to Wirecard – a “soft exit” was planned, as he explained to the committee of inquiry, i.e. a “creeping end”. . But why didn’t Commerzbank then sell the loan to another lender, as is usual in such cases? Why did the bank leave the search for a new lender to Wirecard, who, according to Chromik in the committee of inquiry, had not kept promises in the past? It was contractually stipulated that the bank would take care of a replacement itself if it did not want to continue its loan. This is what the contract shows, which is available to the SZ. Apparently, the board did nothing about it. And Wirecard let things slide, preferring to look for successful new lenders instead of replacing the old ones. Why, then, didn’t the chief risk officer at least push for buying derivatives to hedge credit risk, as Deutsche Bank, for example, did successfully? She was able to limit her losses to 18 million euros, although she had previously granted even more credit than Commerzbank. The “prospective termination of the customer relationship with Wirecard” was “risk-adequate and therefore justifiable,” Commerzbank said.

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