Wirecard’s former CEO Markus Braun arrives in the courtroom as his trial continues, after the German payments company collapsed in the wake of a fraud scandal in 2020, in Munich, Germany, December 12, 2022. REUTERS/Lukas Barth
The former Wirecard CEO Markus Braun began his defence in Germany’s biggest post-war fraud trial on Monday, as his lawyer dismissed allegations of wrongdoing at the defunct payments company as “absurd” and prejudiced.
Braun, 53, and two other managers are on trial on charges including market manipulation and fraud and could be sentenced for up to 15 years in prison if convicted.
Braun has always denied wrongdoing.
Wirecard’s collapse two years ago sent shockwaves through the German political establishment and tarnished the country’s business reputation.
At the start of the trial last week, prosecutors accused Braun and others of being part of a gang that invented vast sums of phantom revenue through bogus transactions with partner companies to mislead creditors and investors.
They said the deception allowed Wirecard’s managers to siphon money out of the company for years.
Braun’s lawyer Alfred Dierlamm’s defence sought to puncture those claims in court on Monday. He told the court that Braun had never sold his Wirecard shares and had actually taken the initiative to call in outside auditors from KPMG to investigate Wirecard’s finances.
“It’s an absolutely absurd and erroneous notion that a gang leader would act like this,” Dierlamm told the court.
He said Braun’s case had been prejudiced since Wirecard’s collapse and his client’s arrest in 2020, alleging that the prosecutors were biased and under pressure to find a culprit after another of Wirecard’s managers, Jan Marsalek, fled abroad.
Braun’s lawyer told the court that the prosecution’s key witness was the main perpetrator.
Dierlamm asked for the trial to be suspended to give the defence more time review documents, given the volume of “files that were dumped on our table”.
Founded in 1999 and based in the Munich suburb of Aschheim, Wirecard’s spectacular rise transformed it from a payment processor for pornography and online gambling to a showpiece for a new type of German tech company that could compete with the established titans of Europe’s largest economy.
Its demise shook the German establishment, putting under scrutiny politicians who backed the company and regulators who took years to investigate it.
After batting away suspicions of wrongdoing from investors and journalists and successfully lobbying the German authorities to investigate those who were scrutinising its finances, Wirecard was forced to admit in June 2020 that 1.9 billion euros ($2 billion) were missing from its balance sheet.
Wirecard became the first-ever member of Germany’s DAX blue chip stock index to file for insolvency, owing nearly $4 billion.
In court, Dierlamm questioned the credibility of statements by Braun’s co-defendant Oliver Bellenhaus, the former head of Wirecard’s subsidiary in Dubai, who became a witness after turning himself in to German authorities in 2020.
Bellenhaus’s lawyer last week asked for a reduced sentence for his client in recognition of his co-operation.
“Bellenhaus is not a key witness,” said Dierlamm. “Bellenhaus is the main perpetrator of a gang” whose sole aim was to divert and embezzle funds from the company.
Another former executive, Stephan von Erffa, is also on trial. He has publicly expressed regret about the events at Wirecard but denied orchestrating them. His lawyer has said von Erffa did not want to comment on the charges.
Marsalek, Wirecard’s former chief operating officer, is an international fugitive on Europe’s most wanted list whose whereabouts are unknown.
A verdict is not expected before 2024 at the earliest.
(Writing by Matthias Williams. Editing by Jane Merriman)