Markus Braun, the former chief executive officer of Wirecard AG, denied all charges at a trial over his role in an epic fraud scandal that sparked the spectacular demise of what was briefly one of Germany's top companies.
In his first public comments about his involvement in an episode that wiped out billions of euros in shareholder value, Braun spoke of a "day of shock and pain" when in June 2020 the once high-flying digital-payment company collapsed and "the world ended."
"I had no knowledge of any forgeries at the company and was never a member of any criminal gang," Braun said at a hearing in Munich on Monday, adding that he is sorry for investors and employees who lost their jobs.
Wirecard crumbled in 2020, admitting that more than $2 billion in cash it had previously reported as merely missing likely never existed, and the company then filed for insolvency a few days later on June 25, 2020 — hammering investors and destroying Germany's efforts to breed a new technology champion rivaling Silicon Valley.
Braun has been on trial at the Munich Regional Court since December alongside two co-defendants — former chief accountant Stephan von Erffa and Oliver Bellenhaus, who ran a Wirecard company in Dubai and who has become a key witness.
Bellenhaus has been cooperating with prosecutors since the very early days of the probe. In his testimony in December and January he told the court that the allegations were true, that the books were cooked at Wirecard and that Braun was behind it.
Braun's lawyer
In his statement, Braun tried to push back on the narrative Bellenhaus had presented in the first weeks of the trial. The former CEO denied that he was a member of the inner circle Bellenhaus had described as being behind the fraud. He also denied that he was the head of a hierarchical system where everyone followed his orders as prosecutors had
"I wasn't an absolutist CEO," Braun said. "On the management board, we discussed everything and decided issues by mutual consent."
Former Chief Operating Officer Jan Marsalek, who has been
When the Financial Times in 2019 questioned the validity of the contracts and how they were booked at Wirecard, the company hired KPMG to look into the matter. Braun said he hoped the probe would end all questions for good.
While Marsalek initially argued against the step he later supported the review, said Braun. But then in February 2020 he surprised him by telling him out of the blue that a few months earlier he'd changed the banks that held an escrow account for Wirecard, moving the money from Singapore to two banks in the Philippines, Braun told the court.
"I asked him whether he had lost his mind," Braun said. But he told him that "this way we would lower the risk the funds could be frozen."
Transfer order
KPMG at some point questioned whether these funds could be considered cash as it wasn't clear how swiftly Wirecard could access them, Braun recalled. So he suggested the auditor named an amount that would be transferred to prove the money was freely available. When that plan was later to be turned into action, Marsalek called him to block it, said Braun. But Braun stuck to it and personally signed the transfer order to dissipate any doubts.
Braun told the judges that he'd been optimistic that once the results were in, the shares would go through the roof. He bought more stock and also prepared reforms, including replacing Marsalek and firing Bellenhaus, who hadn't been supportive of the KPMG probe. He said he never imagined that there was no money in the escrow accounts.
But on June 16, 2020, Wirecard was notified that the accounts in the Philippines were "spurious." For another two days, Marsalek was able to maintain the myth that this was simply a mistake, Braun recalled.
"But then the world ended," the former CEO said.
Braun is expected to continue his testimony and answer questions by the court for several more hearings. The next trial date is scheduled for February 16.
