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Wirecard AG: an outrageous case of corporate governance, external auditing and supervisory failures
On 18 June 2020 Wirecard AG (“WD”), one of Europe’s FinTech success stories and a "blue chip" of the German stock market, disclosed it may have mis-reported €1.9 billion in its balance sheets, filling for insolvency a few days later.
In light of this disastrous governance, supervision and audit failure, BETTER FINANCE put forward several policy recommendations for EU authorities under the following headings:
- Supervision failure: the need for consistent regulation & supervision of financial services providers whoever they are
- Supervision failure: investigate the functioning and goals of the public supervisors in this case
- External audit failure: investigate the audit firm’s failure and the impact of “long-term relationships” of audit companies with listed companies
- Corporate governance failure: review corporate governance rules
- Indemnification of the victims: stop discriminating individual equity investors in eu draft rules on collective redress
- Securities exchange indices must be more flexible in listing and de-listing
Guillaume Prache, Managing Director of BETTER FINANCE warned that “Wirecard is a terrible case of accumulated failures by supervisors, auditors and corporate governance bodies, resulting in huge detriment for non-insider investors and pension savers. EU policy makers must draw the lessons and act swiftly. Otherwise their stated goals to achieve a Capital Markets Union that “works for people” and to restore investor trust will remain wishful thinking.”
BETTER FINANCE Member and leading shareholder association in Germany, DSW, repeatedly criticised Wirecard in the last years for its lack of transparency and weak Corporate Governance structures.
“The ad-hoc disclosure of 18 of June 2020, in which the company stated that there was no proof for the escrow accounts about 1.9 billion € made clear that our worst fears were being surpassed“, said Marc Tüngler, DSW‘s chief managing director.
DSW - supported by BETTER FINANCE – is reaching out to all Wirecard investors with the possibility of a lawsuit for investors to get their money back, allowing not only Wirecard shareholders, but also bond holders and holders of derivatives on Wirecard shares, to recuperate their losses.
- BETTER FINANCE Press Release "Wirecard AG: an outrageous case of corporate governance, external auditing and supervisory failures, once again at the expense of investors and pension savers"
- DSW Press Release: "Compensation for Wirecard investors only via legal action"
European Savers one step closer to getting Sustainable Value for their Money
A little over 6 months after the European Commission (EC) launched its High-Level Forum (HLF) on the Future of CMU, the group of 28 experts published its “New Vision for Europe’s Capital Markets” with a list of key recommendations. Several of those have been proposed by BETTER FINANCE and endorsed by the Group, which is good news for EU Citizens as Financial Users