Marcus Braun told Wirecard’s top lawyer that compliance was ‘nonsense’, court hearing

Wirecard Chief Executive Officer Markus Braun told its general counsel that compliance was “nonsense” and unnecessary for the now-collapsed German payments group, a panel of judges in the Munich district court heard Wednesday.

Braun and two other former top managers face charges of fraud, embezzlement, and accounting and market manipulation in an ongoing trial after the group went bankrupt in June 2020, announcing that its accounts €1.9bn did not exist.

Braun, who has denied any wrongdoing, previously portrayed himself as working hard to improve controls and compliance at Wirecard.

He also claimed that the controversial contracts approved by him and other board members were investigated by Wirecard’s legal department.

The group’s former top lawyer Andrea Gorres, who was questioned as a witness in the trial, disputed that account, telling the court that her small team of 12 people lacked the resources to conduct a comprehensive investigation.

She claimed that Wirecard’s management board obstructed an internal investigation, failed to hand over relevant data in a timely manner and mandated that she should personally run a significant audit in Singapore, for which she did not have time. He repeatedly asked for more employees but the management ignored these requests.

Presiding Judge Markus Fodisc read testimony given to criminal prosecutors shortly after the Wirecard collapse, in which Braun said in a private meeting that he did not want a compliance team because it was “unnecessary and nonsense”.

Gores confirmed the gist of her testimony but added that she could no longer remember Braun’s exact words. “But that was his general attitude (regarding compliance).”

She said that Burkhard Ley, then chief financial officer, shared that view. “They told me that one and a half employees was enough to be compliant,” Gorres said. As a result, the compliance team can only provide “elementary” services, she said.

Gorres claimed that top managers, including Braun, often disregarded legal advice. On one occasion, Braun said: “Every Dax CEO has one foot in jail sometimes,” Gores told the court. Asked whether he thought Braun was joking or being serious, he told the judge: “I didn’t find it funny.” He said that on several occasions Braun ordered that certain sensitive information should not be shared with the supervisory board.

Gores told the court that, in 2019, managers noticed that there was no documentation of the 2012 and 2017 elections of supervisory board members at subsidiary Wirecard Bank, and cast doubt on whether a legally required vote had taken place. The company made those minutes with retrospective effect and signed them by the persons concerned.

She told the judge that the legal department had concluded that the conduct was not criminal, which Fodisc questioned. “I personally would never have signed a post-dated contract,” he said, adding that he warned executives, including the then head of accounting, Stefan von Erfa, that in some situations it could be fraudulent. .

The court case over Germany’s biggest corporate scandal began in December and is expected to last until at least mid-2024.