? ? ? EU watchdog to investigate German watchdog ! ! !

The European Securities and Markets Authority [ESMA] is to investigate the German finance watchdog [BaFin] over the collapse last week of German internet payments company Wirecard.

Wirecard collapsed on Thursday 25th June 2020 owing $4 Billion,  Reuters reports. Personally I am not aware of any other agency reporting this either in UK or France, despite today being day 3 or 4 of the news breaking.

Wirecard’s auditors for the last 10 years, EY [ie big 4 auditor Ernst and Young] said the hole in the company’s books was the result of a sophisticated global fraud, according to Reuters.

Reuters also states that allegations of financial impropriety have been linked to Wirecard “for years”.

Wirecard is the first company listed on Germany’s prestigious DAX index ever to go bust. Reuters reports that a report co-authored by Fraser Perring in 2016 alleged fraud. A source is cited by Reuters as saying that two-thirds of sales in its accounts were “faked”.

The ascent of Wirecard, which was founded in 1999 and is based in a Munich suburb, was dogged by allegations from whistleblowers, reporters and speculators that its revenue and profits had been pumped up through fake transactions states a Reuters report dated 25th June 2020 [see links below].

EY failed to identify this and act, despite the $ millions such firms are paid. Bafin failed to deal with this, despite being the German national authority charged to do so, and presumably funded by the taxpayer, either directly or indirectly.

The European agency tasked in this very area does nothing until its too late. How many EU regulations do they have at their disposal ? How much does their existence cost the European Taxpayer ?

Who on earth thinks that an organisation whose auditors have refused to sign off its accounts for two decades because of financial inconsistencies comes anywhere close to being credible to conduct an investigation  ?

How is it that all these expensively funded Corporate bodies tasked to ensure such scandals don’t happen totally failed in their mission ?

You need only one healthy brain cell and a normal sense of right and wrong to know the answer to that question.

Ray Catlin