Wirecard executives ordered to pay €140 million in damages

In a recent development in the Wirecard scandal, a Munich court has ordered former CEO Markus Braun and two other executives to pay €140 million (£123 million) in damages. This ruling is a result of loans provided to a Singapore-based business partner that were never repaid.

The court found that Braun and his colleagues violated their fiduciary duties in making these financial decisions.

On Thursday, Judge Helmut Krenek upheld the claims made by insolvency administrator Michael Jaffe. The court determined that Braun, along with the finance and product directors, had breached their duties by extending an unsecured loan of €100 million to a company in Singapore.

Additionally, they were found negligent for subscribing to bonds without conducting a thorough financial audit, despite legal advice to the contrary. Consequently, the court ruled that the former executives are liable for damages totalling €140 million plus interest.

The action against a member of the supervisory board was dismissed, and the judgment is not yet legally binding. Jaffe argued that Braun and the other managers had lent €200 million to Ocap, of which only €60 million was repaid.

At the time, Ocap was already in arrears with payments. Jaffe and investors are pursuing damages from Wirecard managers and auditors through various civil lawsuits.

Another chapter in the ongoing Wirecard saga?

This case is separate from the main criminal trial involving Braun and other executives over the larger scandal surrounding Wirecard’s collapse in 2020. The company’s downfall left a €1.9 billion hole in its finances, making it one of Germany’s largest corporate scandals.

The broader Wirecard trial involves charges of fraud and falsifying financial statements, with Braun maintaining his innocence. German prosecutors have also charged additional former executives with embezzlement, and ongoing civil lawsuits seek damages from Wirecard managers and auditors.

Braun, deputy finance chief Stephan von Erffa, and Wirecard’s Asia representative Oliver Bellenhaus are currently on trial in Munich, accused of fraud and falsifying financial statements.

Braun denies all wrongdoing.

In August, German prosecutors charged another two former Wirecard executives with several counts of embezzlement.

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