Germany plans regulatory overhaul after Wirecard scandal: newspaper By Reuters

2/2
© Reuters. FILE PHOTO: The logo of Wirecard is pictured at its headquarters in Aschheim

2/2

BERLIN (Reuters) – German Finance Minister Olaf Scholz is seeking a regulatory overhaul to avoid a repeat of the supervisory failures that allowed Wirecard build up a 2 billion euro hole in its accounts before collapsing last month, Sueddeutsche Zeitung reported.

The proposals, contained in a draft seen by the newspaper on Thursday, involve a relaxation of rules preventing the body that regulates auditors from informing the Finance Ministry if they find any irregularities.

Wirecard (DE:) collapsed in June after EY, its auditor for more than a decade, refused to sign off on its 2019 accounts. Three former top executives at the payments company were arrested on Wednesday. Prosecutors suspect them of faking the company’s accounts.

In future, under the proposals, companies will be obliged to change their auditor every 10 years and stricter divisions will be imposed between auditors’ consulting and auditing businesses.

The proposals also envisage new powers for financial regulator Bafin to intervene when it suspects irregularities at banks, insurers or payment services companies.

The proposals are a reaction to suggestions that regulators were slow to act despite having received reports from whistleblowers as long ago as 2015 about irregularities at Wirecard.

Scholz, who is the leading candidate to lead his Social Democrat Party (SPD) into next year’s national election, is facing criticism from other parties after it emerged that he had been told of irregularities at the company 18 months ago.

The minister plans to review the matter of auditors’ civil liability for their failings and is also considering potential changes to criminal law, the newspaper said.

“I want to strengthen the rules so cases like this can never happen again,” he was quoted as saying.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Be the first to comment

Leave a Reply

Your email address will not be published.


*