Markus Braun, the former chief executive officer of collapsed tech firm Wirecard AG, insisted he acted properly when he told markets two months before the company's spectacular demise that a KPMG probe found no wrongdoing — even though the auditor didn't have access to the documents it needed.
Testifying at his Munich trial over the demise of the company, Braun said on Thursday that while KPMG was missing all documents for the years 2016 to 2018 from a business area under review, publishing the ad hoc release was still within his "margin of appreciation" as a company executive. He said a KPMG partner working on the case had also told him that and the firm itself didn't publish a correction after his release.
"At the time, I acted to the best of my knowledge and belief," Braun told the court. "That was my state of knowledge at the time, or my opinion."
The ad hoc release was published on the evening of April 22, 2020, telling the markets that while a KPMG report of accounting fraud allegations was delayed, the probe so far hadn't revealed evidence of balance-sheet manipulations. The shares jumped 11% the next day, according to the indictment, only to plummet 26% on April 28, 2020 when the probe report was finally published, revealing that KPMG hadn't got the information it had requested.
Prosecutors in their indictment cited an email and a call by the KPMG partner, which warned Braun beforehand that publishing the April release would be wrong and misleading. The KPMG partner is expected to be summoned to testify at a later stage in the Braun trial. Wirecard had hired KPMG in 2019 to examine allegations the payment processor had cooked its books.
Wirecard crumbled in June 2020, admitting that more than $2 billion in cash it had previously reported as merely missing likely never existed. The company filed for insolvency a few days later on June 25, 2020, hammering investors and destroying Germany's efforts to breed a new technology champion rivaling Silicon Valley.
Earlier this week, Braun denied all charges in court. He has been on trial since December alongside two co-defendants — former chief accountant Stephan von Erffa and Oliver Bellenhaus, who ran a Wirecard company in Dubai. Bellenhaus has become a key witness and has told the court that the allegations against all three were true.
At the hearing on Thursday, Presiding Judge Markus Foedisch asked about a written summary of an interview prosecutors did with the former CEO during their investigation, citing Braun as admitting he manipulated markets by publishing the release. Braun replied that this part of the summary was wrong and his lawyer had swiftly written to prosecutors to correct that.
