Angela Merkel advocated on behalf of the once publicly traded, multibillion-dollar corporation.
In the wake of a scandal that shocked the German establishment, the trial of the former executives of payments corporation Wirecard commences, becoming Germany’s largest fraud case.
CEO Markus Braun will appear in a new, bomb-proof court constructed 5m (16ft) underground to try terror suspects.
He and two other Wirecard managers, Oliver Bellenhaus and Stephan von Erffa are accused of fraud and market manipulation for their alleged participation in the collapse of the payments company.
If convicted, they face up to 15 years in prison.
Wirecard was once valued at $28 billion (£22.9 billion). It went from being a porn and gambling payments processor to a reputable tech corporation listed on the Frankfurt Stock Exchange and a component of the Dax index of German blue-chip stocks.
The prosecution contends that Wirecard’s management fabricated revenue to defraud investors and creditors.
Mr. Braun has been in detention since 2020, and the firm has acknowledged that €1.9 billion (£1.63 billion) went missing, but he has denied embezzling funds and accused others of running a shadow operation without his knowledge.
In July 2020, he was detained a second time on accusations of being a member of a criminal organization that acquired more than €3 billion from creditors through a scheme using phony accounts.
The demise of Wirecard was meteoric. It was the only member of the Dax to declare bankruptcy, owing creditors about $4 billion (£3.28 billion). The collapse rocked German politics and regulators and damaged the country’s standing in the commercial world.
Former German chancellor Angela Merkel was a backer of the corporation as she advocated for Wirecard in China while it sought an acquisition. She briefly pondered bailing out the company.
As Ms. Merkel’s finance minister, the current chancellor, Olaf Scholz, was also subject to criticism.
During his time as the company’s finance director, Mr. Scholz was criticized for a lack of monitoring. In the aftermath of the scandal, he increased the authority of the German financial regulator BaFin and appointed new leadership for the agency. The head of BaFin and the head of Germany’s accounting watchdog both resigned following the death of the company.
Wirecard had successfully persuaded German authorities not to examine the company, but rather to probe the investors and journalists who had made allegations of misconduct.
Ms. Merkel and Mr. Scholz have both stated that they are not responsible for the incident.
After turning himself into German authorities in 2020, former CEO Mr. Bellenhaus became a key witness, while Mr. von Erffa expressed regret for the Wirecard incidents but denied involvement in their planning. His attorney told Reuters that Mr. von Erffa declined to comment on the allegations.
Jan Marsalek, the former chief operating officer of Wirecard who is a significant suspect and an international fugitive whose whereabouts are unknown, is not on trial.
A verdict is not expected until at least 2024, and there are hundreds of court hearings scheduled until the end of 2023.
