{"id":5919,"date":"2024-10-07T17:55:58","date_gmt":"2024-10-07T17:55:58","guid":{"rendered":"https:\/\/finderica.com\/three-former-wirecard-executives-found-personally-liable-for-e140mn\/"},"modified":"2024-10-07T17:55:58","modified_gmt":"2024-10-07T17:55:58","slug":"three-former-wirecard-executives-found-personally-liable-for-e140mn","status":"publish","type":"post","link":"https:\/\/finderica.com\/?p=5919","title":{"rendered":"Three former Wirecard executives found personally liable for \u20ac140mn"},"content":{"rendered":"
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Former Wirecard boss Markus Braun and two other executives have been ordered to pay \u20ac140mn plus interest in damages to the defunct payment group\u2019s administrator over violations of professional duties.<\/p>\n

In a long-running civil suit brought by Wirecard administrator Michael Jaff\u00e9, Braun, former chief financial officer Alexander von Knoop and former chief product officer Susanne Steidl have been found personally liable for losses from unsecured loans to allegedly fraudulent business partners in Asia.<\/p>\n

Wirecard collapsed into insolvency in 2020 after disclosing that half of its revenue and \u20ac1.9bn in cash did not exist. Braun has been in police custody for more than three years and is facing a criminal trial that is still ongoing. Von Knoop and Steidl were charged with breach of trust last month but were not remanded in custody.<\/p>\n

The management decisions at the heart of the civil trial in Munich underpin a small fraction of the alleged misconduct at Wirecard, once hailed as one of the country\u2019s most successful fintechs and at its peak valued at more than \u20ac24bn on the stock market. <\/p>\n

The administrator\u2019s claim for damages focuses on potentially fraudulent loans to suspicious business partners in Asia, which on paper were generating a big chunk of Wirecard\u2019s revenue and profits. <\/p>\n

In March 2020, just months before the German firm\u2019s collapse, Wirecard forked out \u20ac100mn in unsecured loans to one of the purported outsourcing partners in Singapore, the Financial Times has previously reported. That payment used the bulk of Wirecard\u2019s remaining liquidity at the time. Some \u20ac35mn of the cash was channelled back to Braun who used it to repay a personal loan he had taken from Wirecard bank. <\/p>\n

The court found that Wirecard\u2019s executive board violated its professional duties as it did not insist on any collateral for the \u20ac100mn, even though the recipient of the loan had been in arrears before. The court said that the board\u2019s decision was \u201cuntenable and at odds with the duty of care of a prudent businessman\u201d. <\/p>\n

According to the judgment, which is not yet legally binding under German law as it can still be appealed, the executive board also violated its professional duties when it decided to purchase securitised bonds from the same Asian business partner that later proved worthless. The board had ignored internal advice to conduct proper due diligence before agreeing to the transaction, according to the judgment. <\/p>\n

The court ruled that the three former executives are personally liable for the financial fallout from those transactions, which it calculated as \u20ac140mn plus 5 per cent interest per year. Since Wirecard\u2019s insolvency more than four years ago, compound interest added up to more than \u20ac30mn, according to FT calculations.<\/p>\n

Before the insolvency, Braun\u2019s shares in Wirecard were worth more than \u20ac1bn. He also owned luxury property in Austria, Germany and France. But his personal wealth has been seized by prosecutors, and earlier this year, his former lawyer Alfred Dierlamm resigned because Braun was unable to pay his legal fees after the funds of his directors and officers\u2019 liability insurance ran out. <\/p>\n

A lawyer for Braun said that they will evaluate the ruling and then decide whether to file an appeal.<\/p>\n

The Munich court ruled that Wirecard\u2019s former deputy chair Stefan Klestil, who had also been sued by the administrator over the matter, is not required to pay damages over the decisions to the administrator.<\/p>\n

\u201cToday\u2019s decision is an important step. It highlights that supervisory boards are ultimately powerless when, as in the case of Wirecard, executives choose not to follow the rules and deliberately bypass the board,\u201d said a spokesperson for Klestil. <\/p>\n

Spokespeople for Steidl and the administrator declined to comment. A lawyer for von Knoop did not immediately respond to requests for comment. <\/p>\n

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Video: Wirecard and the missing \u20ac1.9bn: my story<\/span><\/div>\n<\/div>\n<\/div>\n

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Unlock the Editor\u2019s Digest for free Former Wirecard boss Markus Braun and two other executives have been ordered to pay \u20ac140mn plus interest in damages to the defunct payment group\u2019s administrator over violations of professional duties. In a long-running civil suit brought by Wirecard administrator Michael Jaff\u00e9, Braun, former chief financial officer Alexander von Knoop<\/p>\n","protected":false},"author":2,"featured_media":5920,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"rank_math_lock_modified_date":false,"footnotes":""},"categories":[206],"tags":[588,585,587,586,584],"class_list":{"0":"post-5919","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-financial-crime","8":"tag-140mn","9":"tag-executives","10":"tag-liable","11":"tag-personally","12":"tag-wirecard"},"_links":{"self":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts\/5919","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=5919"}],"version-history":[{"count":0,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts\/5919\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/media\/5920"}],"wp:attachment":[{"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=5919"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=5919"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=5919"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}