Germany to sever ties to accounting regulator after Wirecard scandal

FILE PHOTO: The headquarters of Wirecard AG, an independent provider of outsourcing and private label solutions for electronic payment transactions, is seen in Aschheim, near Munich, Germany, on April 25, 2019. REUTERS / Michael Dalder / File Photo

BERLIN (Reuters) – The German government plans to terminate its contract with the country’s accounting watchdog after payments company Wirecard declared insolvent last week in one of Germany’s biggest fraud scandals, an official said Sunday. of the government.

The Bild am Sonntag newspaper reported earlier Sunday that the Ministries of Justice and Finance on Monday would cut ties with the Financial Reporting Enforcement Panel (FREP), an almost private entity that oversees the financial statements of publicly-traded companies. .

“We have reached an agreement with the finance ministry to terminate the contract,” said the Justice Ministry official, who declined to be named or give further details.

The finance ministry declined to comment. FREP also declined to comment.

Wirecard collapsed Thursday due to nearly $ 4 billion creditors after revealing a hole in its books that its EY auditor said was the result of sophisticated global fraud.

The scandal has focused on Germany’s financial regulator BaFin, whose investigations into the misconduct depend in part on FREP and face accusations of not supervising the financial technology company.

BaFin declined to comment.

Report by Markus Wacket; Written by Joseph Nasr; Edited by Susan Fenton

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