Wirecard received no special treatment, says Merkel

Angela Merkel, German Chancellor, defended her lobbying for Wirecard in China in 2019, claiming that there was “no reason to assume” at the time that there were serious irregularities within the fraudulent payment company.

Merkel was talking to a Bundestag investigation investigate how German politicians and financial regulators failed to detect one of the worst cases of fraud in post-war German history. Merkel’s testimony is the culmination of the six-month investigation.

In her opening statement, she said her government regularly lobbies for the economic interests of German companies abroad and that Wirecard was no exception. But she denied that Wirecard received “special treatment” during her visit to China. “The fact that [it] was discussed in China had its logic, ”she said.

“Despite all the press reports, there was no reason at the time to assume that there were serious irregularities at Wirecard,” she said. She insisted she hadn’t followed the “negative or positive” media coverage of the company, but said there were a lot of people at the time who thought Wirecard was a “very large technology company ”.

But opposition MPs said given the volume of critical reporting in 2019, the Chancellor should have avoided Wirecard. Merkel “did not cover herself in glory,” said Danyal Bayaz of the Greens. “She promoted the interests of a criminal enterprise in China.”

At the time of Merkel’s trip to China, Wirecard was trying to break into China by acquiring Chinese payments company AllScore Financial. To seal the deal, it took the approval of the Chinese regulator, the People’s Bank of China. Merkel raised the issue with her Chinese interlocutors during her trip.

She said Wirecard’s willingness to enter the Chinese market “matched” Berlin’s strategy of trying to open up China’s financial services industry.

Wirecard announced last June that 1.9 billion euros was missing from its accounts and collapsed shortly after in insolvency. Munich prosecutors accuse its former managing director, Markus Braun, of having launched a criminal racketeering which led to “frauds by the billions”. Braun, who has been in custody since last summer, denies the wrongdoing.

Merkel said the Wirecard affair was a “slap in the face of hundreds and thousands of honest businessmen” in Germany.

She was speaking to MPs a day after Finance Minister Olaf Scholz appeared before the survey. He came under special scrutiny for his role as supervisor of financial regulator BaFin, which was criticized for not suing Wirecard and for suing FT reporters and short sellers who instead discovered irregularities in the company’s accounting practices.

In their questioning of Merkel, MPs focused on a meeting she held with her former defense minister Karl-Theodor zu Guttenberg, now chairman of the consultancy firm Spitzberg Partners, on September 3, 2019, a few days before the trip to China. Guttenberg, who was advising Wirecard at the time, discussed his acquisition of AllScore Financial and asked for the chancellor’s help.

Merkel said she did not recall Wirecard being mentioned during the meeting. She said she passed the case on to experts from the Chancellery’s economic department, led by her senior advisor, Lars-Hendrik Röller.

Merkel defended her decision to meet with Guttenberg, saying she accepted requests for personal meetings from former government ministers as “obvious”.

But under questioning, she expressed her frustration with the conversation, saying “I don’t particularly appreciate” when former colleagues use personal conversations with her to “make certain requests.”

“We need strict and clear rules to avoid situations in the future where chancellors are recruited for lobbying interests,” said Bayaz, the Green MP.

Röller also came under scrutiny over an email which MPs said showed his wife had attempted to establish business contacts for Wirecard in China. Merkel said she had no reason to doubt Röller’s “loyalty and integrity”.

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