Wirecard's former boss Markus Braun appearing in front of a parliamentary inquiry last week, where he refrained from answering questions but read a statement saying regulators or auditors were likely to have been “massively misled”. Reuters
Wirecard's former boss Markus Braun appearing in front of a parliamentary inquiry last week, where he refrained from answering questions but read a statement saying regulators or auditors were likely to have been “massively misled”. Reuters
Wirecard's former boss Markus Braun appearing in front of a parliamentary inquiry last week, where he refrained from answering questions but read a statement saying regulators or auditors were likely to have been “massively misled”. Reuters
Wirecard's former boss Markus Braun appearing in front of a parliamentary inquiry last week, where he refrained from answering questions but read a statement saying regulators or auditors were likely

Wirecard sought to disrupt KPMG's special audit


  • English
  • Arabic

Wirecard continuously obstructed a special audit by accounting firm KPMG, a probe that ended up uncovering fictitious bookings on a massive scale and hastened the collapse of the once high-flying German mobile payment company.

Speaking at a parliamentary inquiry in Berlin on Thursday, KPMG partner Alexander Geschonnek laid out how his company was confronted with “considerable obstacles” in its task to unpack Wirecard’s accounts dating back several years.

Interviews with key counterparts were routinely delayed or moved, and accounting probes couldn’t be fulfilled because the company didn’t provide the required data, Mr Geschonnek said. As a result, KPMG struggled to fulfill its mandate, he said.

“It proved impossible to sufficiently comprehend the transaction volumes from 2016 to 2018,” Mr Geschonnek, who works at the KPMG Forensic division, told the inquiry in Berlin.

KPMG billed Wirecard €5.8 million ($6.9m) for the audit, but ended up receiving just €5.3 million, Mr Geschonnek said. At one point, KPMG even considered aborting the task outright, which involved as many as 40 accountants during a six-month process, he said.

The auditor’s account is a key part of an investigation trying to understand why Wirecard collapsed, and if the company’s alleged malfeasance could have been detected sooner. KPMG was brought on by Wirecard to do a special audit late last year, reviewing the accounts that had already been signed off by longterm auditor Ernst & Young.

One episode that has drawn particular attention was a trip by auditors and company management earlier this year to Manila in the Philippines, where Wirecard said its partner companies held large sums of cash from transactions in escrow accounts. But in Geschonnek’s telling, employees at the local bank were unable to produce the requested documents, raising suspicions.

By the time KPMG handed over its report, the auditor had concluded there was no evidence that funds in the escrow accounts in Asia actually existed, he said. Geschonnek said he was “surprised” how even after repeated requests, Wirecard failed to provide proof that the money allegedly sitting in the escrow accounts was there.

Wirecard filed for insolvency in late June, after admitting that €1.9billion in funds never existed. Former chief executive Markus Braun was detained shortly thereafter and is in jail, while his number 2, chief operating officer Jan Marsalek, is on the run and now features on Interpol’s Most-Wanted list.

Mr Braun appeared in front of the parliamentary inquiry last week but largely refrained from answering questions beyond brief introductory comments. In that statement, he said regulators or auditors were likely “massively misled”.

Our legal advisor

Rasmi Ragy is a senior counsel at Charles Russell Speechlys, a law firm headquartered in London with offices in Europe, the Middle East and Hong Kong.

Experience: Prosecutor in Egypt with more than 40 years experience across the GCC.

Education: Ain Shams University, Egypt, in 1978.

The specs: 2018 Honda City

Price, base: From Dh57,000
Engine: 1.5L, in-line four-cylinder
Transmission: Continuously variable transmission
Power: 118hp @ 6,600rpm
Torque: 146Nm @ 4,600rpm
Fuel economy, combined: 5.8L / 100km

The specs

AT4 Ultimate, as tested

Engine: 6.2-litre V8

Power: 420hp

Torque: 623Nm

Transmission: 10-speed automatic

Price: From Dh330,800 (Elevation: Dh236,400; AT4: Dh286,800; Denali: Dh345,800)

On sale: Now

Labour dispute

The insured employee may still file an ILOE claim even if a labour dispute is ongoing post termination, but the insurer may suspend or reject payment, until the courts resolve the dispute, especially if the reason for termination is contested. The outcome of the labour court proceedings can directly affect eligibility.


- Abdullah Ishnaneh, Partner, BSA Law 

The burning issue

The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE.

Read part three: the age of the electric vehicle begins

Read part two: how climate change drove the race for an alternative 

Read part one: how cars came to the UAE

 

Rock in a Hard Place: Music and Mayhem in the Middle East
Orlando Crowcroft
Zed Books

Disturbing%20facts%20and%20figures
%3Cp%3E%3Cstrong%3E51%25%3C%2Fstrong%3E%20of%20parents%20in%20the%20UAE%20feel%20like%20they%20are%20failing%20within%20the%20first%20year%20of%20parenthood%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3E57%25%20vs%2043%25%3C%2Fstrong%3E%20is%20the%20number%20of%20mothers%20versus%20the%20number%20of%20fathers%20who%20feel%20they%E2%80%99re%20failing%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3E28%25%3C%2Fstrong%3E%20of%20parents%20believe%20social%20media%20adds%20to%20the%20pressure%20they%20feel%20to%20be%20perfect%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3E55%25%3C%2Fstrong%3E%20of%20parents%20cannot%20relate%20to%20parenting%20images%20on%20social%20media%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3E67%25%3C%2Fstrong%3E%20of%20parents%20wish%20there%20were%20more%20honest%20representations%20of%20parenting%20on%20social%20media%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3E53%25%3C%2Fstrong%3E%20of%20parents%20admit%20they%20put%20on%20a%20brave%20face%20rather%20than%20being%20honest%20due%20to%20fear%20of%20judgment%3C%2Fp%3E%0A%3Cp%3E%3Cspan%20style%3D%22font-size%3A%2014px%3B%22%3ESource%3A%20YouGov%3C%2Fspan%3E%3C%2Fp%3E%0A
The specs

Engine: 2.0-litre 4-cylturbo

Transmission: seven-speed DSG automatic

Power: 242bhp

Torque: 370Nm

Price: Dh136,814