Adrian Daub, 21 April 2021
German scandals are not like other scandals. The bouquet of a classic German scandal contains unmistakable notes: a rabbit-hole impenetrability, the implication of an entire guilt-ridden society, and, most importantly, a sense that the controversy says something essential about Germany as a whole. German scandals are collectivized. They are about a belief in German difference, for good or ill.
The rise and fall of the financial services giant Wirecard is such a scandal. Wirecard, whose products facilitated e-commerce payment transactions, was the rare German startup that seemed primed to become a “global player”—a phrase with special resonance in a country that, despite all evidence to the contrary, still perceives itself as being small-time. The company was founded in 1999, survived the dotcom-bubble, began a massive expansion into Asia in the middle of the financial crisis, and, later, began another expansion into the Middle East.
Its story was regarded as something of a German miracle, right down to the fact that the sources of its success seemed somewhat mysterious. During an appearance last January, then-CEO Markus Braun, clad in a black turtleneck like a real-life version of Dieter from Sprockets, claimed, “I like not to talk too much about technology acronyms,” before rattling off RFID and NFC, not to mention artificial intelligence, fintech, and machine learning. Wirecard checked every box on the buzzword bingo card.
Starting in the early 2010s, rumblings about fishy accounting practices at Wirecard started to build. Six years ago, the Financial Times reported that the company routinely inflated its assets and the number of transactions it actually handled. After breaking the story, the Financial Times rang the alarm bell again and again, dedicating as many as eight articles a year to new revelations. These articles often caused Wirecard’s stock price to nosedive. Before long, German regulators sprang into action—although not in the way one might have assumed.