5/1/2023 0 Comments Five star notebooksWoven into the tale are colourful portraits of the two men who ran Wirecard: its perma-optimistic, turtleneck-wearing chief executive, Markus Braun, and Jan Marsalek, the cunning, narcissistic chief operating officer. ![]() The financial regulator investigated the ft and short-sellers (for alleged market manipulation) rather than the company, and, citing Wirecard’s “importance for the economy”, banned the shorting of its stock. The German press, including Handelsblatt, the business newspaper of record, mostly swallowed the firm’s line that the attacks on it were illegal moneymaking schemes, or part of an Anglo-Saxon plot to destroy a continental European champion. Politicians refused to condemn Wirecard some accused its critics of envy. The German establishment, meanwhile, buried its head in the sand, or worse. In 2019, more than five years after the first reports of accounting shenanigans, just two of 26 analysts covering the stock recommended selling it. Such frauds are common in China, but in orderly Germany? The highest-profile believer was SoftBank, which poured $1bn into Wirecard in 2019, assuaging other investors’ growing doubts-and cementing its own reputation as one of the world’s least discerning tech investors. Many investors, caught up in the general tech optimism, refused to believe Wirecard could be rotten, even as the incriminating evidence mounted. Wirecard’s critics also had to contend with its boosters in markets and the media. A reader complained that one was like a French film: “I’ve read all the subtitles, I’ve paid attention, but I have no idea what the ending was all about.” The stories he was able to publish had to be toned down. This response slowed Mr McCrum down, at one point causing a damning article to be spiked for fear of an injunction. (Schillings told him it acted entirely properly and complied with all legal and regulatory obligations.) Wirecard also sued in its homeland, spuriously accusing the paper of misusing its business secrets the suit was dropped. ![]() Lawyers from another practice, alleges Mr McCrum, “played the part of the waiter carrying the tray, taking no view on whether its client had poisoned the drinks”. The company also made full use of Britain’s strict libel law, hiring Schillings and other firms to pound the ft with legal threats. This induced paranoia: Mr McCrum took to keeping his notebooks in a safe with six-inch steel walls, and jumping off Tube trains just as the doors were closing, in case he was being tailed. At one point, according to an ex-policeman the author interviewed, Wirecard had more than 30 private detectives “running round London” and trying to dig up dirt on Mr McCrum, ftcolleagues and the short-sellers. Computers were hacked, offices suspected of being bugged, false stories put about. Wirecard fought back viciously and dirtily. The battle to expose the truth had to be waged on several fronts. Over seven years, aided by a handful of short-sellers and carefully cultivated whistleblowers, he pieced together a picture of a firm built on fraud, with fake customers, invented profits and cash balances that looked flimsier the closer you got. The investigative journalist at the Financial Times ( ft) first heard about the company in 2013, jotting down its name with a question mark after a hedge-fund manager suggested he look under the bonnet. ![]() Wirecard might still be one of Europe’s most feted tech firms, were it not for a small band of sceptics-including Dan McCrum.
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