In the Munich Wirecard trial, the former chairman of the supervisory board reported organizational deficiencies and maneuvers that were difficult to understand at the company that collapsed in 2020. However, the former supervisory board chairman Thomas Eichelmann did not make any direct criminal allegations against the former CEO Markus Braun, who was accused of alleged billion-dollar fraud, or his two co-defendants on Wednesday in the Munich regional court.

“Who expected to find themselves in some kind of spy thriller when they sat on the supervisory board of a DAX company,” said the 58-year-old.

The former management consultant became a member of the supervisory board a year before Wirecard’s insolvency in June 2019, and he took over the chairmanship in the final phase in January 2020. “There was nothing that was super noticeable,” said Eichelmann about his early days on the supervisory board .

The supervisory board ordered a special audit of the balance sheets

However, since the London “Financial Times” had reported in several reports over the course of the year about alleged falsification of balance sheets at the Bavarian DAX group, the supervisory board ordered a special audit of the balance sheets by the auditing firm KPMG. In April 2020, the auditors finally came to the conclusion that there was no clear evidence of one billion in recorded revenue.

The supervisory board therefore asked Braun to make the deficiencies mentioned by KPMG public in an ad hoc announcement. This compulsory stock exchange report should contain the explicit reference that the allegations against the group’s so-called third-party partner business in doubt had not been resolved, as Eichelmann said. The third-party partners were companies through which, according to the indictment, sham transactions worth billions were conducted.

However, there was no mention of this in the ad hoc announcement published by Braun on April 20, 2020. Instead, the text said that the auditors had found no incriminating evidence of balance sheet manipulation. The supervisory board then discussed whether Braun should be fired and therefore sought legal advice.

Billions of euros cannot be found

“I wasn’t excited, I was stunned, you could say,” Eichelmann recalled. However, in the lawyer’s opinion, it was not enough for a dismissal. The KPMG auditors were also of the opinion that the third-party business was probably real, but not sufficiently documented.

Two months later, it emerged that 1.9 billion euros in proceeds that allegedly came from third-party business could not be found. That meant the end for Braun – a few days before the company had to file for bankruptcy. “Dr. Braun had a few minutes to think about whether I should take him out or whether he would resign voluntarily,” said Eichelmann. Braun opted for “voluntary.”

Eichelmann also reported that the group only presented many figures at almost the last second when preparing the consolidated balance sheet for 2018. During the special audit, the company did not provide many documents and did not keep the agreed appointment times.

Braun and two other former Wirecard managers have been on trial since December for commercial gang fraud. According to the indictment, they have falsified Wirecard’s balance sheets since 2015 and damaged lending banks by 3.1 billion euros. Braun denies all allegations.

The former chairman of the supervisory board, Eichelmann, is legally struggling with the consequential damage of Wirecard’s insolvency. The insolvency administrator Michael Jaffé has filed a “corporate liability lawsuit” against both the former board of directors and the former supervisory board. The question is whether the Wirecard board members and their controllers have to pay compensation for breach of duty.