Germany’s Social Democrat Finance Minister Olaf Scholz is facing calls from rival parties to account for the regulatory failures that led to the collapse of Wirecard after it emerged he knew of concerns about the company 18 months ago.
The payment services company filed for insolvency last month after disclosing a 1.9 billion euro ($2.2 billion) hole in its accounts that auditors blamed on a global accounting fraud.
Scholz, seen as the party’s best hope to succeed conservative Chancellor Angela Merkel next year, was informed in February 2019 that investigators were looking in “all directions” when regulators banned short-selling of Wirecard’s shares, according to a parliamentary report seen by Reuters.
While there is no suggestion that Scholz knew of any malpractice, rival parties have suggested the Social Democrats’ (SPD) most prominent politician bears responsibility for regulators’ failure to spot problems.
“The fact that Olaf Scholz was informed as early as early 2019 about the Wirecard case strengthens the sense of a collective failure of responsibility,” said Danyal Bayaz, finance spokesman for the Greens, who have moved into second place in the polls by eating into the SPD’s voter base.
Merkel’s Christian Democrats, in coalition with the SPD, also urged Scholz to stop “looking away” and focus on the alleged supervisory failings by BaFin, the markets regulator for which Scholz is responsible.
The complaints have so far had little impact on Scholz, who is among Germany’s most popular politicians. But they could yet hurt his beleaguered party, which has few leadership candidates left after a string of electoral setbacks.
For now, the party remains committed to their main hope, with legislators accusing the other parties of mud-slinging.
“I see no reason for the Wirecard scandal to be dangerous for Olaf Scholz,” said SPD legislator Jens Zimmermann. “He had to go along with what BaFin was telling him.”