29/09/2020

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Merkel Promoted Wirecard to Chinese Officials Before Scandal

(Bloomberg) — Angela Merkel promoted Wirecard AG during a past state visit to China, the...

(Bloomberg) — Angela Merkel promoted Wirecard AG during a past state visit to China, the latest revelation about the government’s association with the fallen German tech darling.

Opposition lawmakers are threatening to call for a parliamentary investigation as they press Merkel’s administration over how it pursued fraud allegations against a member of Germany’s benchmark DAX index.

Underscoring the impact of the scandal, the finance committee in Germany’s lower house of parliament plans to interrupt the summer recess to hold a special session on July 29 to discuss Wirecard.

Finance Minister Olaf Scholz and Economy Minister Peter Altmaier have been invited, as well as officials from the government’s Financial Reporting Enforcement Panel, according to Daniel Bayaz, a lawmaker from the Green party.

‘Last Chance’

“The government needs to end its piecemeal approach and finally put everything on the table,” Bayaz said via email, calling next week’s hearing the “last chance” for the government to avoid a parliamentary investigation.

Wirecard became a national disgrace when it said last month that a quarter of its balance sheet probably doesn’t exist. That set off a blame game between banks, auditors and public authorities and revealed large gaps in the country’s accounting oversight.

Questions have also been raised about what government officials knew about Wirecard’s problems and when they were informed about them. Scholz was aware of suspicions of market manipulation at the digital payments company in February 2019, almost a year and a half before it collapsed.

Merkel has kept the scandal at arm’s length, but now risks being drawn in.

“During her discussions in China, the chancellor mentioned Wirecard along with topics affecting other companies,” Merkel’s deputy spokeswoman Ulrike Demmer said Monday at a regular government press conference in Berlin, noting that advocating for German companies is standard practice during such trips.

“The chancellor definitely wasn’t aware of irregularities at Wirecard at the time,” she added, without specifying the time frame.

(Updates with details of planned committee hearing)

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