Wirecard ex-CEO Braun, 2 others ordered to pay $202m in damages to insolvency administrators

Berlin – Former Wirecard chief executive officer Markus Braun and two other executives at the defunct German payments firm were ordered to pay €140 million (S$202 million) in damages on Sept 5 over loans to a Singapore-based business partner that were never repaid.

A Munich court judge upheld claims by insolvency administrator Michael Jaffe that Braun and others had violated their duties in deciding to provide the loans to Ocap Management.

The Singapore-based firm was a “financially weak contractual partner”, the court said.

The loan extended by Wirecard was itself unsecured and represented “an unacceptable risk and a breach of the duty of care of a prudent businessman”, the court said. The recipient was already in arrears on another loan to the tune of some €2.4 million, the court pointed out.

There were also doubts that business activities “closely related to the loan... actually existed”, the court said.

The verdict, which is not final, is the latest chapter in one of Germany’s most egregious corporate scandals and is separate to the main trial against Braun and other executives over Wirecard’s demise.

The company collapsed in June 2020 with a €1.9 billion hole in its balance sheet, turning the spotlight on politicians who backed it and regulators accused of moving too slowly to investigate allegations against it.

Braun, then deputy finance chief Stephan von Erffa and Wirecard’s then Asia representative Oliver Bellenhaus are currently on trial in Munich, Germany, 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.

Mr Jaffe and investors are trying to sue Wirecard managers and auditors for damages in various civil lawsuits. REUTERS, AFP