One of Angela Merkel’s closet aides defended the chancellery’s lobbying for Wirecard, saying that he had no knowledge of financial irregularities at the disgraced payments company at the time.
Lars-Hendrik Röller, Ms Merkel’s senior economic adviser, was questioned about his role in the Wirecard scandal on Tuesday by MPs who are investigating possible regulatory failings by German authorities in the affair.
MPs wanted to know why he recommended that Ms Merkel lobby for Wirecard during an official trip to China in September 2019. The trip came months after whistleblowers had raised serious concerns about fraud at the payments processor that triggered a police probe in Singapore.
Mr Röller said Wirecard fulfilled the two main criteria for such lobbying decisions: it had business in the country Ms Merkel was travelling to and it was seeking to enter that country’s market for financial services, which “was 100 per cent in Germany’s interest”, and “fitted in with government policy”.
Wirecard at the time was trying to break into China by acquiring a Chinese payments group, Allscore Financial. To seal the deal it required the approval of the Chinese regulator, the People’s Bank of China. Ms Merkel raised the issue with her Chinese interlocutors during her trip.
“In the chancellery we had no information about any serious financial irregularities [at Wirecard],” he told MPs. “From our present vantage point I see things differently.”
Wirecard announced last June that €1.9bn in cash was missing from its accounts. Within a week it had collapsed into insolvency, and €13bn in stock market value had been wiped out, in what has turned into the worst accounting scandal in Germany’s postwar history.
Mr Röller said he received an email from a lobbyist for Wirecard on September 3 2019, two days before Ms Merkel’s China trip, about the Allscore deal and the need for PBoC approval. He said he forwarded it to the department of the chancellery that was preparing the trip and asked for it to be included in a file of subjects for her to raise during her official talks.
He said it is not usual for the chancellery to conduct a “forensic” investigation into a company that asks for support from the chancellor. He said that without red flags being raised by the company’s supervisory board, its auditors and the German financial markets regulator BaFin, “it’s hard for us to behave otherwise”.
“Why should we have had a critical attitude [to Wirecard]? . . . It was a Dax-listed company.”
He said the finance ministry had not flagged problems at Wirecard prior to Ms Merkel’s China trip and not recommended that she refrain from speaking about the company in her talks with Chinese officials. “If we had known [about irregularities at the company] we would have taken this information into account,” he said.
Mr Röller said the Wirecard scandal was “very alarming” and “very bad for Germany as a financial centre”.