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Wirecard’s collapse sparks German soul-searching over work of auditors, financial regulator
21 August 2020 00:00
Payment processor Wirecard had been hailed as a German superstar in the world of financial services — an example of how a strong idea could see Europe compete with the Silicon Valley giants. Then things went awry, with media reports of behind-the-scenes irregularities. Finally, it was revealed that Wirecard had a 1.9 billion-euro accounting blackhole, leading the company to collapse, leaving aggrieved creditors and shareholders in its wake. The debate over Wirecard’s implosion is now centering on Germany’s financial regulator, BaFin, and the shortcomings of its oversight; the failure of the company’s auditor, EY, to identify the accounting problems is also attracting scrutiny.
A legal case taken by Wirecard investors against the German financial regulator BaFin is in “uncharted waters”.