Business EU to oversee Wirecard investigation

EU to oversee Wirecard investigation

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EU to oversee Wirecard investigation

saturday, 27.06.2020

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news-single-imgcaption” style=”width:240px;”>The European Commission wants a preliminary analysis by July 15 at the latest. (Keystone)

Brussels has asked European supervisors for a preliminary inquiry into the handling of the online payment company Wirecard by the German financial police.

In this letter sent Thursday evening to Steven Maijoor, president of the European Financial Market Supervisory Authority (ESMA), the European Commission requests that this “preliminary analysis” be concluded “no later than July 15”.

“We will do this work and present our conclusions,” said a spokesman for the European regulator, David Cliffe, refusing to comment further on the matter.

Suspected of having inflated his accounts with fictitious funds in the Philippines, the German company which employs 6000 people filed for bankruptcy on Thursday.

The German government denounced a “scandal without equivalent in the world of finance” and announced a tightening of controls in this sector which is still little watched.

“At this stage, this preliminary analysis should aim to establish a complete description and an evaluation of the events, including the adequacy of the surveillance to these events which led to the bankruptcy of Wirecard”, it is written in the letter of the European Commission.

In an interview with the British daily newspaper Financial Times European Commission Vice-President Valdis Dombrovskis said on Friday that the investigation was to determine “whether there were breaches of surveillance and, if necessary”, to “define a possible course of action” .

“We need to clarify what went wrong,” he said, as Germany prepares to take over the rotating EU presidency for six months on July 1.

According to the results of this preliminary investigation, there could be a full investigation leading to the submission of a report by ESMA, an institution based in Paris. This report would list the gaps in supervision and give instructions to the German finance police (BaFin) to introduce reforms in its working methods.

For its part, the British financial gendarme (FCA) froze Wirecard’s activities in the United Kingdom in order to “protect” the money of its users.

In a press release on Friday, the FCA said it had “imposed certain constraints on (the British subsidiary of) Wirecard, in particular the fact that the company” cannot sell any assets or funds “and also requiring it to communicate to its customers that it does is more empowered to conduct operations.

The British subsidiary, Wirecard Card Solutions, provides prepaid cards and payment services for other smaller financial companies like Pockit or Curve.

Their hundreds of thousands of users have no longer had access to their funds since the FCA blocked Wirecard Card Solutions’ activities, many of them going crazy on Twitter.

Pockit said Friday “to work with the FCA to resolve this issue as soon as possible”.

In France, payment cards without a Transcash bank account, also issued by Wirecard Card Solutions, are also temporarily frozen. (awp)

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