Wirecard chief executive Markus Braun told his general counsel that compliance was “nonsense” and unnecessary for the now-collapsed German payments group, a panel of judges from the Munich District Court heard Wednesday.
Braun and two other former top executives face charges of fraud, embezzlement and accounting and market manipulation in an ongoing trial after the group filed for bankruptcy in June 2020, declaring that the €1.9 billion held in its accounts did not exist.
Braun, who has denied any wrongdoing, rather characterized himself as pushing hard to improve controls and compliance at Wirecard.
He has also claimed that controversial contracts approved by him and other board members had been investigated by Wirecard’s legal department.
The group’s former top lawyer, Andrea Görres, who was questioned as a witness in the trial, disputed that story, telling the court that her small team of 12 people lacked the resources for comprehensive checks.
She alleged that Wirecard’s board thwarted internal investigations, failed to hand over relevant data in a timely manner, and decided she needed to personally conduct an important audit in Singapore, which she did not have time to do. She repeatedly asked for more staff, but management ignored these requests.
Presiding Judge Markus Födisch read out testimony Görres gave to criminal prosecutors shortly after Wirecard collapsed, including Braun telling her in a private meeting that he didn’t want a compliance team because it was “unnecessary and nonsense.”
Görres confirmed the content of her testimony, but added that she could not remember Braun’s exact words. “But that was his general attitude (with regard to compliance).”
She said then-chief financial officer Burkhard Ley shared that view. “He told me that one and a half employees was enough to comply with the rules,” said Görres. As a result, the compliance team was only able to provide “rudimentary” services, she added.
Gorres claimed that top executives, including Braun, often disregarded legal advice. On one occasion, Braun said, “Every CEO of DAX has one foot in prison at some point,” Görres told the court. When asked if she thought Braun was joking or serious, she told the judge, “I didn’t think it was funny.” Braun has ruled on several occasions that certain sensitive information should not be shared with the supervisory board, she said.
Görres told the court that managers noticed in 2019 that there was no documentation of the 2012 and 2017 elections of supervisory board members at subsidiary Wirecard Bank, and that there were doubts whether the legally required vote had taken place at all. The company drew up those minutes afterwards and had them signed by the persons involved.
She told the judge that the legal department concluded that this behavior was not criminal, which was questioned by Födisch. “Personally, I would never have signed a retroactive contract,” she said, adding that she warned executives, including then-head of accounting Stephan von Erffa, that this could constitute fraud in certain situations.
The trial over Germany’s biggest recent corporate scandal began in December and is expected to run at least until mid-2024.
