Posted on: December 20, 2022, 11:45h.
Last updated on: December 20, 2022, 01:12h.
The former head of Wirecard’s Dubai subsidiary admitted his complicity Monday in the widescale accounting fraud that led to the spectacular collapse of the German fintech giant. At the same time, he pointed the finger at his codefendant, ex-CEO Markus Braun.
Oliver Bellenhaus told a Munich courtroom that Braun was an “autocratic chief executive” who was obsessed with creating the illusion that Wirecard was more successful than it really was.
The allegations were made in the ongoing trial of three former Wirecard executives, whom German prosecutors accuse of committing a “massive criminal act” that led to the demise of the payments company.
Wirecard began life in the 1990s as a processor of online gambling and porn transactions. It grew into the leading light of German fintech, with a market cap of €22 billion ($25 billion) in 2018. But all was not as it seemed.
Missing $2B
In June 2020, auditor Ernst & Young reported that €1.9 billion (US$2 billion) in cash balances mentioned in Wirecards’ accounts appeared to be missing. This money was supposed to be sitting in trustee accounts at two Philippine banks. But the banks denied Wirecard was a client.
Days later, the company admitted the money was missing and “likely never existed.”
The defendants in the case face charges including fraud, embezzlement, and market manipulation, and could be jailed for up to 15 years if convicted. They are accused of cooking the books to artificially inflate the company’s value and defraud investors and lenders.
Bellenhaus told the court he deeply regrets his behavior, adding that he acted out of blind loyalty to Braun.
“Braun gave the marching orders and everyone followed,” he said.
Last week, Braun’s lawyer, Alfred Dierlamm, described Bellenhaus as an unreliable witness and accused him of being the main perpetrator of the fraud, along with Jan Marsalek, who is currently a fugitive.
‘Shadow Operation’
Dierlamm said his client was unaware of the accounting irregularities, adding that Bellenhaus and Marsalek were running a “shadow operation” that siphoned off money into shell accounts.
Dierlamm also noted his client was the company’s biggest shareholder and had never sold his shares – in fact, he had increased his holding shortly before the company’s collapse. This demonstrated he had not attempted to profit personally from the inflated share value and appeared oblivious to impending catastrophe.
Dierlamm contends that German prosecutors were under pressure to find a scapegoat for the fraud because Marsalek has slipped through their grasp.
Marsalek fled Germany as Wirecard collapsed, traveling to Belarus and then onto Moscow. He is believed to have connections to Russian intelligence agencies.