German lawmakers flip sights on finance ministers in Wirecard fraud fiasco

FeliciaF.Rose

By John O’Donnell, Tom Sims FRANKFURT (Reuters) – Contemporary from toppling the head of Germany’s prime monetary regulator last 7 days, lawmakers are turning their fireplace on finance minister Olaf Scholz and his deputy Joerg Kukies. FILE Image: German Finance Minister Olaf Scholz attends a session at the lessen residence […]

FRANKFURT (Reuters) – Contemporary from toppling the head of Germany’s prime monetary regulator last 7 days, lawmakers are turning their fireplace on finance minister Olaf Scholz and his deputy Joerg Kukies.

FILE Image: German Finance Minister Olaf Scholz attends a session at the lessen residence of parliament Bundestag in Berlin, Germany, December 9, 2020. REUTERS/Hannibal Hanschke

As their inquiry into the collapse of Wirecard gathers rate, it has place Germany’s largest fraud centre stage in countrywide elections in which Scholz would like to stand for chancellor.

“The target of the parliamentary inquiry will additional and much more change to the position of Scholz and his ministry,” Florian Toncar, a lawmaker involved in the investigation explained.

The inquiry into the implosion of a payments firm which was once worth $28 billion and hailed as a German achievement tale has ashamed the country’s governing centrist coalition.

Scholz and Kukies, who deny accountability for failings which led to Wirecard’s collapse, have responded with reforms to the structure and leadership of monetary watchdog BaFin.

They presented further details on Tuesday, such as designs to make it extra agile in responding to whistleblowers, supplying the agency, Scholz stated, “more bite”. [L8N2K83ND]

But lawmakers are growing impatient, with some these as Danyal Bayaz declaring Scholz has been slow to answer.

“The hard inquiries about political duties only commence now,” Fabio De Masi, one particular of the lawmakers driving a parliamentary inquiry into the affair, told Reuters.

Scholz’s Social Democrats (SPD) have been in a coalition federal government with Angela Merkel’s Christian Democrats (CDU) for a long time and he hopes to do well her as chancellor in elections afterwards this yr adhering to her final decision to retire.

But the SPD is having difficulties with voters, polling a distant third at the rear of the CDU and the Greens, even though criticism of Scholz is also emanating from within just Merkel’s get together.

“Consequences for the finance ministry are now overdue,” CDU parliamentarian Hans Michelbach reported.

KUKIES CONNECTIONS

Kukies’ purpose has also come below shut scrutiny and lawmakers have highlighted many conversations he held with regulators, Wirecard executives, bankers and other people.

The Finance Ministry mentioned these were being section of his occupation.

Lawmakers say they also want to study a 100 million euro ($121 million) loan to Wirecard by a subsidiary of point out lender KfW in September 2018, some two a long time in advance of its collapse.

One man or woman with expertise of the make a difference advised Reuters that the cash was unsecured and that 90% of the personal loan by KfW’s IPEX lender had been composed off.

The finance ministry explained that the bank’s supervisory board, on which Kukies sat, was not included and figured out of the mortgage only in the middle of final calendar year.

The lawmakers are also calling for particulars of communications concerning Kukies and the CEO of Goldman Sachs in Germany, his former employer, De Masi stated.

Goldman Sachs declined to comment, referring to Wolfgang Fink’s assertion that he experienced no contact with officers on Wirecard.

The Finance Ministry also explained there experienced been no contact.

German lawmakers are not the only kinds to see the root trigger of BaFin’s challenges in the finance ministry, a weak spot also flagged by European regulators previous calendar year.

Hans-Peter Burghof, a professor at the University of Hohenheim, explained the ministry experienced a long time in the past employed many of the agency’s prime personnel. “They shed this spirit of independence.”

($1 = .8288 euros)

Extra reporting by Patricia Uhlig in Frankfurt, Christian Kraemer and Michael Nienaber in Berlin Modifying by Alexander Smith

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