A Munich court has ordered three former Wirecard executives to pay €140 million in damages. This ruling marks another significant development in the ongoing Wirecard scandal, as the court seeks to secure funds for the company’s creditors.
The Munich Regional Court has ruled that three former Wirecard executives must pay a total of €140 million in damages plus interest. Presiding Judge Helmut Krenek determined that they acted at least negligently in granting a loan and issuing bonds, making them liable for the resulting damages.
The verdict specifically implicates former CEO Markus Braun, along with the former finance and product executives. The lawsuit was filed by insolvency administrator Michael Jaffé, who aims to secure funds for Wirecard’s creditors. It’s important to note that the ruling is not yet legally binding, and legal observers expect appeals to be filed.
Former supervisory board chairman exempt from payment
While the court found the executives liable, it rejected part of Jaffé’s lawsuit. The former deputy chairman of the supervisory board will not be required to pay damages. Although Judge Krenek acknowledged that the supervisory board member had violated his supervisory duties, he concluded that this did not lead to liability. The judge reasoned that since the executive board had previously disregarded supervisory board directives, it was uncertain whether supervisory board measures would have been effective in these two cases.
Clear responsibility assigned to executives
The court saw clear responsibility for the three executives because the loan was not secured, and there was no thorough financial assessment before the bonds were issued. For Braun and the finance executive, Krenek directly derived responsibility from their departmental responsibilities. In the case of the product executive, he argued that she should have become suspicious.
This ruling represents a significant step in holding former Wirecard executives accountable for their roles in one of Germany’s largest financial scandals. As the legal process continues, it remains to be seen how this decision will impact the ongoing efforts to compensate Wirecard’s creditors and restore faith in corporate governance.
ⓘ Wirecard AG was a German payment processor that collapsed in June 2020 after revealing that €1.9 billion was missing from its accounts, leading to insolvency and the arrest of several top executives. The scandal exposed significant regulatory failures and has been compared to the Enron scandal in the U.S.
