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Berlin (dpa) - The federal government is drawing conclusions from the spectacular balance sheet scandal at the former Dax group Wirecard: Complex company structures are to be controlled more closely.

To this end, the cabinet passed a draft law that gives the Federal Financial Supervisory Authority (Bafin) more powers.

In addition, stricter rules for statutory auditors will be introduced.

"The draft law is a decisive step to strengthen the balance sheet control, to reform the auditing and to crack down on criminal machinations," said Finance Minister Olaf Scholz (SPD).

Among other things, it will ensure that the balance sheets and certificates of auditors can be relied on more.

"The rules are being tightened significantly and the supervisors are getting more bite," announced Scholz.

The Bundestag still has to approve the changes.

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You should avoid another scandal like the now insolvent fintech company Wirecard.

The group is said to have reported fictitious profits since 2015.

In the summer he had admitted air bookings of 1.9 billion euros - according to investigations by the public prosecutor's office, it could go up to more than three billion.

As a service provider for cashless payments, the company sat at the interface between merchants and credit card companies and, according to the current state of investigations, made losses for years.

EY's auditors, its regulatory agency Apas and the financial regulator Bafin have come under fire because the fraud was not noticed earlier.

Due to the scandal, some weaknesses in the balance sheet had become clear, said Scholz on Deutschlandfunk.

"That's when we realized that many possibilities didn't even exist, which we probably all somehow hoped would be used normally."

The Federal Government draws the following conclusions:

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BAFIN INVESTIGATIONS: Financial regulators have so far only come into play late when reviewing listed companies.

Initially, private auditors were responsible for auditing, then the German auditing agency under private law (DPR).

That is changing now.

In the event of suspected cases, the Bafin will in future be directly responsible for inspections - if necessary even against the will of the company.

AUDITORS: In future, auditors should change every ten years at capital market companies so that they do not become operationally blind.

They should no longer be allowed to examine and advise a company at the same time.

In addition, the auditors are held more liable: The maximum liability limits for auditing capital market-oriented companies are increased by four times to 16 million euros.

In the case of grossly negligent behavior, there is no longer any maximum limit.

HARDER PENALTIES: The “false balance sheet oath”, ie when it is falsely claimed that a financial statement gives an accurate picture of the situation of a company, is to be sanctioned with up to five years imprisonment.

"This also applies to an incorrect certificate from the auditor on the conclusion of a company of public interest," said Justice Minister Christine Lambrecht (SPD).

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FINANCIAL TRANSACTIONS OF BAFIN EMPLOYEES: Private financial transactions of Bafin employees should be severely restricted in order to avoid any appearance of a conflict of interest.

Opposition members commented that the federal government was tackling some long overdue conclusions with its law.

However, there are still loopholes, for example in the rules for the auditor supervision Apas, said the Green finance politician Danyal Bayaz.

The balance sheet control procedure is also still not powerful enough.

Bayaz, FDP finance politician Florian Toncar and Fabio De Masi from the Left accused Scholz of staging the law and protecting himself.

"But that does not replace clarification," they emphasized with reference to the Wirecard scandal.

© dpa-infocom, dpa: 201216-99-715857 / 2

Ministry of Finance on the Wirecard case