John O’donnell, Tom Sims, 23 April 2021
In February 2019, after a steep drop in Wirecard’s share price, German authorities launched criminal probes into short-sellers and journalists who had accused the company of fraud, and banned investors from betting against the company.
Documents seen by Reuters show for the first time that the only independent information – beyond Wirecard’s representations – received by Munich prosecutors who launched the criminal probes was a third-hand account of events from a convicted money launderer, Daniel James Harris.
The rationale that led to the decisions of prosecutors and regulators to launch the criminal probes and short-selling ban, and whether they were overzealous in supporting Wirecard, are central issues being investigated by a parliamentary inquiry into the company’s collapse in Germany’s biggest post-war fraud scandal.
The criminal probes and short-selling ban were launched by authorities after Wirecard complained it was being targeted by unidentified speculators who it said were in cahoots with two Financial Times journalists and had advance knowledge of a negative report that it said baselessly alleged accounting manipulations.
Some Wirecard executives were in fact engaged in a sophisticated global fraud at that time, the German government, prosecutors and regulators said last year after the payment company filed for insolvency, owing creditors almost $4 billion.
The trove seen by Reuters includes thousands of pages of emails, chat messages and memos provided by German authorities to the parliamentary inquiry, which reaches a climax this week with testimony from Chancellor Angela Merkel on Friday.
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