Markus Braun, ex-CEO of collapsed payment processor Wirecard, alongside two other executives, have been ordered to pay €140m to the company’s administrator after management non-compliance led to falsifying accounts in 2020.
Braun, along with former Chief Financial Officer Alexander Von Knoop and former Chief Product Officer Susanne Steidl, were a part of a civil suit that found the three ex-Wirecard executives to be liable from the near €2bn of losses that were attached to unsecure loans from alleged fraudulent Asian business partners.
The administrator’s claimed damages cite the losses from the alleged fraudulent loans, which covered a large portion of Wirecard’s profits and revenue, ultimately leading to its insolvency and collapse in 2020.
Braun resigned from the company after news of artificially inflated company financials broke weeks earlier, and was subsequently arrested. He has remained in police custody awaiting trial for the last three years.
Von Knoop and Steidl, whilst not remanded in custody, were charged with breach of trust recently at a Munich court. Former Wirecard Deputy Chair Stefan Klestil was not ordered to pay any damages despite being initially sued by the administrator.
A spokesperson on behalf of Klestil commented on the court verdict: “Today’s decision is an important step. It highlights that supervisory boards are ultimately powerless when, as in the case of Wirecard, executives choose not to follow the rules and deliberately bypass the board.”
The court found that the board at Wirecard failed and violated its responsibility over company funds. Much of the recent civil trial surrounds a €100m loan that the recipient should have received much earlier than agreed upon and was not backed by collateral by the execs.
Whilst the penalty issued against Brain, Von Knoop and Steidl can still be appealed under German law, the executive trio were also found to have been in breach of professional duties by acquiring securitised bonds from the same Asian business partners it received loans from.
This charge stems from the court finding that the board had ignored internal advice and failed to act due diligently prior to greenlighting the loan transaction. This totalled €140m with attached interest and the execs were found personally liable for any resulting losses.