BERLIN – Two weeks after the spectacular collapse of German financial technology giant Fincard, Deutsche Bank said Thursday that it was open to provide emergency financing to help keep the company running, even when its former chief executive is out on bail and his main assistant is hiding. from the authorities.
“We are, in principle, prepared to provide this support,” said Sebastian Krämer-Bach, a spokesman for Deutsche Bank, “if such assistance were necessary.”
The lender said the offer was being discussed with Germany’s financial regulatory agency and the insolvency administrator who currently handles Wirecard’s affairs. He did not provide further details.
The statement was perhaps the first good news for Wirecard since the company, once a rising star on the German tech scene that provides digital payment services worldwide, imploded two weeks ago after its auditor couldn’t find 1,900 million euros ($ 2,100 million) listed in the company’s books. The revelation forced the resignation of Markus Braun, the longtime CEO. He was later arrested on suspicion of market manipulation and released on bail after spending the night in jail.
Wirecard, which has 5,700 employees, later said that the 1.9 billion euros probably did not exist and requested insolvency.
The company’s headquarters on the outskirts of Munich have been searched twice by police in recent weeks. The former chief operating officer Jan Marsalek, who was fired shortly before Braun was arrested, is believed to be hiding in Asia, according to press reports.
Wirecard shares, which were trading at € 104 a share in mid-June, fell to € 3.10 on Thursday.
Deutsche Bank has faced its own problems in recent years, and in January reported a loss for 2019 of € 5.3 billion. Once the largest asset bank in Europe, Deutsche Bank is trying to recover from years of its own scandal and mismanagement.
The Wirecard scandal has cast doubt on the effectiveness of Germany’s financial regulator BaFin. The agency’s director admitted at a conference Thursday about supervisory problems.
“In fact, this raises questions that I have asked regularly for the past two years, and that we must address at the regulatory and political level,” said BaFin President Felix Hufeld. He noted that the regulator’s formal responsibility was simply for a Wirecard-owned bank, not the entire company.
The government has yet to announce any specific changes to BaFin. But this week, he said he would dissolve the Financial Reporting Panel, a private group that aided BaFin and was responsible for Wirecard’s accounting oversight.
