Berlin It was a short night for the MPs. Until three in the morning the questioning of Deutsche Bank boss Christian Sewing im Wirecard– Committee of inquiry lasted. Since 8:30 a.m. it continued on Friday morning. Topic on day two: the responsibility of the state bank KfW in the bankruptcy of the payment service provider Wirecard – and the perspective of Goldman Sachs on the accounting scandal.
The first witness on Friday was Klaus Michalak, head of KfW subsidiary Ipex. This was heavily criticized in the course of the Wirecard demise. KfW Ipex had loaned Wirecard 100 million euros as part of a banking consortium – and extended this line again in summer 2019, when the problems at Wirecard had long been virulent.
In contrast to Deutsche Bank, for example, the bank had waived appropriate hedging transactions. Michalak had to make the consequences transparent to the MPs: In total, his own commitment cost almost 90 million euros, which means that around 90 percent of the 100 million euros loan amount had to be written off, the bank boss said. However, even after repeated inquiries, Michalak was unable to identify any significant misconduct by his institute.
Critical press articles, such as those of the British newspaper “Financial Times” from 2019 onwards, have been seen. “We not only took up the warning signals that were given, but also took them very seriously,” says Michalak. “But this has to be weighed against the mitigating signals. And we did that very conscientiously. ”
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When asked why a state bank has to look after a company that has grown up in payment processing for gambling and porn sites, Michalak referred to the “positive development” in Aschheim, such as McKinsey’s commitment to expanding compliance. “The history of Wirecard’s customer focus was an issue. But Wirecard had not only developed significantly technically, at least in perception, but also in the market situation. “
Critique of the revision
However, the fact is: Wirecard was initially listed in the wrong program by KfW Ipex. The group was provided with loans as part of KfW Ipex’s export promotion. Only after criticism of the revision was the customer assigned to the “Innovation and Digitization” group.
The actions of the public institute met with incomprehension among the MPs. The KfW apparently wanted to do business with Wirecard with all their might: “We are seeing the biggest balance sheet scandal in decades and the KfW state bank co-financed it and thus made the Wirecards fraud system possible,” complained CSU parliamentarian Hans Michelbach. “It is questionable whether the duty of care under the Banking Act has been observed.”
Michelbach was “stunned” according to his own statement about a critical report by KfW-Ipex internal auditing, which had already warned of the risks of his own commitment before the bankruptcy of Wirecard and which was available to the MPs.
According to this, KfW would have had the chance to request collateral every six months, including when the loan was extended in summer 2019. Michalak explained why this had not happened by saying that the collateral could only have been requested from the group subsidiaries. Their securities are not of great value. And: “Because we did not see that the daughters were taking out their own loans, the instrument was not relevant for us,” said the bank manager.
“How do you explain that Ipex has lost 90 million euros and Deutsche Bank only 18 million euros?” Was one question. “I cannot comment on how the portfolio strategies and hedging strategies of competitors are going,” was the answer. The structure of one’s own credit process is “appropriate”. It is not unusual for a company the size of Wirecard to enter into unsecured commitments. And anyway: your own staff is well positioned. Or, in the words of Michalak: “Our competence structure is absolutely in line with the market.”
Sharp criticism from the MPs
The MPs had serious doubts about the latter, given the level of default at the state bank and the early internal warnings. The unanimous opinion was that KfW had apparently left all warning signals cold.
“In 2019 there were already massive doubts about Wirecard at Ipex. Nevertheless, the 100 million euro loan was extended, ”says FDP financial expert Florian Toncar – and particularly criticized the Bafin’s ban on short sales.
Left-wing parliamentarian Fabio De Masi explains, referring to its founding name: “With Ipex, KfW seemed more like a credit institution for Wirecard, not a credit institution for reconstruction. Internally, there were major fears about Wirecard, but the credit exposure was adjusted and ratings were adjusted so that the Supervisory Board did not have to be informed. This contradiction was not cleared up. “
Green MP Danyal Bayaz adds: “The state-owned KfW Ipex has certainly not covered itself with fame for its Wirecard commitment. It is doubtful that a company like Wirecard with a dubious gambling history fits the legal mandate of Ipex. “
The dispute over the appropriateness of KfW’s actions has long been an issue for the public prosecutor. At the end of September 2020, there was a search of the head office due to suspicion of breach of trust against several managers of the bank. “I can confirm that the Frankfurt Public Prosecutor has started an infidelity investigation. I do not want to comment on the procedure any further, even at the request of the Frankfurt Public Prosecutor, so as not to jeopardize the investigation, ”said Michalak.
What did the state secretaries know?
With the statement by the KfW Ipex boss, the Wirecard scandal is moving even closer to the political arena. Because there is one special feature: The state bank subsidiary has two state secretaries on the supervisory board: Ulrich Nussbaum from the Federal Ministry of Economics and Jörg Kukies from the Federal Ministry of Finance.
Michalak explained that the supervisory board was not involved in lending to Wirecard. It was not until June 19, the day when CEO Markus Braun was replaced, that the supervisory board was informed of the “dramatic development”, whereupon it requested further information. None of the state secretaries had not warned him, so Michalak. The “information bomb” in Aschheim only burst on June 18.
The question of whether selected financial institutions knew more about the problems at Wirecard through special wires in politics also determined the subsequent hearing of Goldman Sachs Germany boss Wolfgang Fink.
He made it clear that his house hadn’t lost any money to Wirecard’s bankruptcy. “Goldman Sachs had not given any consulting mandates or financing to Wirecard,” said Fink. Deposit accounts for two Wirecard subsidiaries were only kept in Great Britain. There were no talks with the federal government about the case.
Afterwards, a heated discussion between FDP parliamentarians Frank Schäffler and Fink relaxed about the question of how often he had met his former colleague in the Goldman Sachs management, ex-Goldman banker Kukies, since he took office as State Secretary. At the request of parliament, the Federal Ministry of Finance stated that there had only been one personal meeting. When asked by Schäffler, however, Fink stated that he exchanged “regularly” with Kukies.
However, even when asked several times, Fink was “unable to remember” whether he had met him “more than once” in recent years. Fink also did not want to disclose how often he exchanged ideas with Kukies by phone, SMS or Whatsapp message.
In response to Schäffler’s question: “Mr. Kukies says he only met you once. They say regularly. What’s right now? “, Fink answered literally:” I’m not sure whether I can reconstruct how often I have exchanged ideas with Mr. Kukies. “
These gaps in memory struck the members of the committee of inquiry as rather strange. You now want to force Fink to reveal his calendar entries and cell phone messages. Further insights into the Wirecard case are therefore not ruled out – there is still a lot of work waiting for the parliamentarians.
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