BERLIN: Chancellor Angela Merkel denied Friday that her government accorded "special treatment" to disgraced payments firm Wirecard, as she was grilled by MPs at a German parliamentary inquiry into the company's dramatic collapse.
Merkel had been called to testify before lawmakers investigating the fraud scandal because of reports that she promoted the company during a trip to China in September 2019, when journalists were already voicing doubt about Wirecard's books. "Despite the press reports, there was no reason at that time to believe that there were serious irregularities at Wirecard," Merkel said at the hearing. The chancellor said her government had for years been working to open Chinese markets to German financial companies.
"Wirecard did not get any special treatment," she said of the company that was eyeing a foray into China at that time. "I was accompanied by 30 firms, and Wirecard was not part of the business delegation," she added.
Once a rising star in the booming fintech sector, Wirecard filed for bankruptcy last year after admitting that 1.9 billion euros ($2.3 billion) was missing from its accounts. Lawmakers are investigating the political and regulatory failings that allowed the Wirecard cheating to go unnoticed for years, with critics saying early warning signs were ignored.
Merkel also played down a reported meeting with her former defence minister Karl-Theodor zu Guttenberg, by then a lobbyist for Wirecard, shortly before the trip.
The meeting had "no relation to my trip to China, and I don't remember Mr Guttenberg mentioning Wirecard," said Merkel, though she added that she "couldn't rule it out".
Frank Schaeffler, an MP from the pro-business FDP party who is on the committee, had said that Merkel should ask herself whether "promoting Wirecard was really appropriate or whether her office should not have looked into the warning signs earlier."
In a report in March, lawmakers on the committee denounced what they called "a culture of non-responsibility" and said that financial authorities and political leaders had "well-founded indications of criminal behaviour at Wirecard". In recent days, the spotlight has fallen on two of Merkel's ministers who have been accused of reacting too slowly to the scandal. Economy Minister and Merkel ally Peter Altmaier denied responsibility on Tuesday, when he was quizzed over his ministry's apparent failure to properly scrutinise Wirecard's auditors. On Thursday Finance Minister Scholz told the committee that "the government does not bear responsibility for this large-scale criminal fraud".
He said that Wirecard's collapse, which led to the arrest of several top executives on fraud and money-laundering charges, was the "biggest accounting fraud scandal" in the history of post-war Germany.
Admitting that official regulators were "not prepared enough" for the scandal, the would-be Merkel successor from the centre-left SPD pledged to "rebuild trust" in Germany as a financial centre.
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