Wirecard: 474-page indictment against ex-CEO Markus Braun – economy

Markus Braun has been in custody in Augsburg-Gablingen, one of the most modern prisons in Bavaria, for almost 20 months. And behind high walls, the former CEO of the scandalous group Wirecard should stay longer according to the will of the Munich I public prosecutor. After investigations around half the world at the Munich I District Court, the law enforcement agency has now brought charges against Braun and two other ex-managers.

One of the two, Oliver B., unpacked, stood up and put a heavy load on Braun. He’s the prosecutor’s key witness. In addition, a former financial manager is to appear in court. This former finance manager denies all allegations, as does Braun. Should the fourth criminal chamber of the Munich I district court allow the indictment and start a process, then it can be assumed that the process will last for years.

On 474 pages, the investigative authority lists what it accuses of Braun as the former “Mr. Wirecard” and the other two accused. The extensive indictment is a clear signal: the public prosecutor wants to obtain a prison sentence against Braun, whom they regard as one of the main culprits for one of the biggest economic scandals in Germany. The result could be more than ten years in prison.

Wirecard has brought misfortune to many people. Tens of thousands, if not more, shareholders have lost more than 20 billion euros. Among them was a Braun employee who testified as a witness to the public prosecutor’s office. The employee said he and his wife had repeatedly bought Wirecard shares to provide for old age. When they retired, they would have wanted to sell the papers again. But now they are in debt with 250,000 euros and his wife’s health is very bad, the former Wirecard employee complained to the public prosecutor’s office of his suffering.

In its best times, the Wirecard share was worth almost 200 euros

When Wirecard was suddenly missing almost two billion euros in mid-June 2020 and the end was in sight, Braun is said to have said internally that everything would be fine. At the end of the year, Wirecard’s share price will be EUR 250. That’s what it says in the investigation files of the public prosecutor’s office. At the end of June 2020, a Wirecard share, which was worth almost 200 euros in the best of times, was only worth a few euros. The Wirecard shares are now scrap paper; they trade for less than five cents a piece.

In addition to the Wirecard board member Jan Marsalek, who is suspected of being in Russia and who is still being searched for, the main reason for this disaster is ex-CEO Braun. The prosecutor’s allegations weigh heavily. Braun and the other two accused are said to have manipulated Wirecard’s share price for years, in 26 cases. 25 of them for commercial purposes and gangs. The many people who bought Wirecard shares are said to have been systematically misled.

A search for Jan Marsalek, the former Wirecard board member, is currently being sought worldwide.

(Photo: Daniel Bockwoldt/dpa)

With “significantly embellished figures” they wanted to give the impression that Wirecard AG was a commercially successful and solvent company, writes the public prosecutor. By the end of 2015 at the latest, Braun and the other two accused had realized that the payment service provider had only made losses, “which would ultimately lead to insolvency.” If the true financial situation had been published, “there would have been a significant drop in prices,” the public prosecutor explains. Insolvency and the fall in prices did not occur until 2020.

The public prosecutor accused Braun, among other things, of commercial gang fraud

The next accusation is that the group balance sheets from 2015 to 2018 were wrong. Braun knew that and still signed the respective annual financial statements as CEO. The other two accused would have supported him. The balance sheet for 2019, which was supposed to be published in mid-2020, never materialized. Because the alleged fraud was then exposed.

The public prosecutor also accuses Braun and the other two accused of commercial gang fraud at Wirecard’s house banks and investors, who have lost more than three billion euros. The banks, including the Landesbank Baden-Württemberg and Commerzbank, and investors were also deceived.

The last serious allegation against Braun is: misappropriation of group assets amounting to several hundred million euros. Wirecard has extended large loans to two companies in Singapore. One of the two companies was Ocap, which Wirecard was supposed to help process credit card payments. However, Ocap originally took care of the financing of oil transports and had nothing to do with credit card payments, the prosecutor writes. Ocap was checked by a member of the criminal gang at Wirecard.D

Wirecard indictment: The former headquarters of Wirecard AG in Aschheim near Munich.

The former headquarters of Wirecard AG in Aschheim near Munich.

(Photo: imago images/Lackovic)

Insolvency administrator Michael Jaffé is claiming part of the Wirecard loans for Ocap, namely 140 million euros, from Braun and other former Wirecard managers by means of a claim for damages. The lawsuit states: “It was evident that the loans to Ocap were only used to smuggle assets out of Wirecard.”

According to the findings of the public prosecutor’s office, the head of the group’s own Wirecard bank initially refused in November 2018 to grant Ocap a loan of 100 million euros. The head of the bank was then expressly instructed by Braun to “transfer the amount without any delay”.

The former Wirecard CEO rejects all allegations

If found guilty on all counts, Braun could face more than 10 years in prison. The former CEO not only rejects the allegations, but also attacks the public prosecutor. This is based on a “false picture of the crime”, the indictment suffers from “serious deficiencies”.

A spokesman for Braun explains that the further proceedings will show that the former CEO “was never part of a gang that embezzled millions of dollars behind his back”. And that Braun knew nothing about the machinations of this gang and certainly did not benefit from these machinations. Braun is even “stunned” by his spokesman because the public prosecutor’s office allegedly did nothing “to look for the embezzled money of the shareholders”.

Wirecard charge: He never wants to have been part of a gang: the former Wirecard boss Markus Braun (here in 2018).

He never wants to have been part of a gang: the former Wirecard boss Markus Braun (here in 2018).

(Photo: Christof Stache/AFP)

In a press release, the ex-CEO gave the impression through his spokesman that the public prosecutor’s office was biased and worked sloppily. “The serious omissions and deficits in the clarification of the facts will characterize the process and also burden it.” The defense was determined to “deal with all allegations point by point”. They will persistently urge that “the whereabouts of the embezzled billions in the interests of the shareholders be fully clarified”.

As a shareholder of Wirecard, like so many shareholders, Braun lost a lot of money with the collapse of the payment service provider, “in fact all of his property”. So he sticks to his line, which has already been drawn through the entire investigation. The longtime CEO would not have been the perpetrator, but the victim.

The core of Braun’s message is that Wirecard’s allegedly largely invented business with third-party partners in Asia really did exist. The group reported assets of almost two billion euros that should be held in escrow accounts in Asia. However, the accounts then turned out to be empty. But not, according to Braun’s thesis, because this third-party business didn’t exist. But because the proceeds from it were embezzled behind his back.

However, the Munich Higher Regional Court did not follow this theory in the most recent detention review of Braun at the end of 2021.

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