'Day of pain': Wirecard boss denies charges in massive fraud trial (updated)

Wirecard AG

13/02/2023 16:19

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      Wirecard boss gives his first detailed account
    

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      Pins blame on other Wirecard managers
    

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      Discovering hole in balance sheet was 'day of pain'
    

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      Accuses other managers of blocking Wirecard audit
    

  
 (Adds quotes, details, background)
    By Jörn Poltz
       MUNICH, Feb 13 (Reuters) - Wirecard's former boss on
Monday denied all wrongdoing over the collapse of the payments
company as he took to the stand for the first time in Germany's
biggest post-war fraud trial, accusing other managers of
scheming behind his back. 
    Dressed in his trademark black turtleneck and rimless
spectacles, Markus Braun, 53, expressed his "deepest regret"
over Wirecard's demise but said he had no knowledge of any
forgery or embezzlement and believed he was running a healthy
business. 
    The Austrian-born former chief executive and two other
ex-Wirecard managers Oliver Bellenhaus and Stephan von Erffa are
on trial on charges including market manipulation and fraud and
face up to 15 years each in prison if convicted.
    Former chief operating officer Jan Marsalek is an
international fugitive on Europe's most wanted list whose
whereabouts are unknown. 
    Braun has been in custody since the 2020 collapse of
Wirecard, which shook Germany's business establishment, putting
politicians who backed it and regulators who took years to
investigate allegations against the firm under intense scrutiny.
    "I had no knowledge of counterfeiting or embezzlement,"
Braun told the court in Munich, describing the discovery of 1.9
billion euro ($2 billion) hole in Wirecard's balance sheet as a
"day of pain" for shareholders and employees. 
    Prosecutors accuse the defendants of being in a gang that
invented vast sums of phantom revenues through bogus
transactions with partner companies to mislead creditors and
investors.
    Braun's lawyers have previously alleged that Bellenhaus was
the main perpetrator of fraud at the company, which began
processing payments for pornography and online gambling and rose
to be a blue chip DAX company worth $28 billion. 
    'NOTHING TO HIDE'
    Bellenhaus, who became a key witness after turning himself
in to the authorities, has painted Braun as an "absolutist CEO"
calling the shots at the heart of a vast swindle.
    In his most detailed statements about Wirecard's collapse
since his arrest, Braun pushed back against that
characterisation, describing his leadership as collegiate.
    Instead, Braun accused Marsalek of constructing a "myth"
that Wirecard's finances were healthy while he and Bellenhaus
tried to obstruct Braun's attempts to hire KPMG as an external
auditor as allegations of wrongdoing at the firm mounted.
    By bringing in KPMG, the aim was to clear up "once and for
all" allegations about balance sheet manipulation, Braun said.
"I told Marsalek we have nothing to hide."
    When 1.9 billion euros went missing from the balance sheet,
"Marsalek was very clever and understood how to explain that it
was a mistake," Braun said, speaking in the same calm and
concentrated voice with which he used to address investor
meetings and press conferences. 
    Matters came to a head in February 2020, Braun said, when
Marsalek came to his office and revealed he had shifted billions
of euros from Singapore to accounts in the Philippines without
the knowledge of Braun or the company's chief financial officer.
    "I didn't scream. It's not my style," Braun said, adding "I
can remember asking him if he had lost his mind."
    Braun said he had resolved to fire Bellenhaus and clip
Marsalek's powers, though the company collapsed before he did
so. 
    Describing Marsalek as intelligent but somewhat withdrawn,
Braun said he was only later made aware of allegations in the
media that Marsalek had ties to the security services and ran a
shadow business operation from a Munich villa.
    Braun also batted away suggestions that he had asked private
security contractors to harass journalists who were
investigating his company. 
    He contrasted Wirecard's demise with accounts of his early
years at the company, describing a struggling startup where he
and other managers pulled all-nighters and worked with a sense
of mission. "There was in reality no life outside the company,"
he said.
 (Reporting by Jörn Poltz and Alexander Hübner; Writing by
Matthias Williams; Editing by Mark Potter and David Holmes)
 ((matthias.williams@thomsonreuters.com;))