Two and a half years after the spectacular bankruptcy of the financial group Wirecard, the mammoth criminal trial against its former boss, the Austrian Markus Braun, has begun. In one of the biggest financial scandals in German history, Braun and two other former managers of the former DAX company will have to answer to the Munich I Regional Court from Thursday. The public prosecutor’s office accuses them of accounting fraud, market manipulation, breach of trust and professional gang fraud.
With a 45-minute delay, presiding judge Markus Födisch opened the major trial against former CEO Braun and his two co-defendants on Thursday. Reading the 89-page indictment alone in the underground high-security wing next to Stadelheim Prison was expected to take an estimated five hours on Thursday.
Wirecard was controlled by a criminal group, according to Munich prosecutors. Braun had joined with other top managers to form a “gang” to pretend the existence of a successful company, prosecutor Matthias Bühring said during the readout.
At the opening of the proceedings, 53-year-old Braun merely confirmed his details. “Correct,” the manager, who has been in pre-trial detention for two and a half years, replied when asked if he was being held in Bavaria’s largest prison. Braun is to testify to the charges next week.
According to the indictment, the managers should have beautifully calculated the unprofitable payment service provider with invented billions in sales to deceive investors and lenders. These lost a double-digit billion sum. Braun has denied the allegations. If convicted, the defendants face up to 15 years in prison. A verdict by the criminal division is not expected until 2024 at the earliest.
At times, the company was worth more on the stock market than Deutsche Bank and even considered taking it over. The financial markets and the media repeatedly accused the company of irregularities. But auditors, financial regulators and prosecutors saw no reason to intervene for a long time.
In June 2020, however, Wirecard had to admit that 1.9 billion euros were missing from the company’s accounts. This triggered an economic and a political tremor. The share price crashed, and the group became the first DAX company to slide into insolvency. Braun resigned and was remanded in custody. An investigative committee of the Bundestag revealed the failure of several supervisory bodies. Leading heads were replaced at the supervisory authority BaFin, the “balance sheet police” DPR and the auditing company EY. The federal government reformed financial supervision.
The Munich Public Prosecutor’s Office and a special police task force investigated the global corporate network surrounding Wirecard in one of their most extensive investigations. Dozens of officers conducted 450 interrogations, searched more than 40 properties in Germany alone and analyzed 42 terabytes of data. Authorities in more than two dozen countries worldwide were called in – from Switzerland to Singapore, from Austria to the Philippines, from Great Britain to Russia. The investigators, led by prosecutor Bühring compiled their findings in more than 700 files.
