Deutsche Financial institution’s head of accounting probed over Wirecard

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Germany’s audit watchdog is investigating Deutsche Financial institution’s head of accounting Andreas Loetscher over potential misconduct in his earlier function at EY, the place he was one of many companions accountable for the audits of Wirecard.

Wirecard, a as soon as high-flying funds firm, obtained unqualified audits from EY for greater than a decade earlier than it collapsed into insolvency this summer time.

Mr Loetscher, who joined Germany’s largest lender in Could 2018 after a two-decade lengthy profession on the Massive 4 agency, is one among not less than two Wirecard auditors who’re personally being investigated by Germany’s audit oversight physique Apas over potential violations {of professional} duties.

Apas can impose fines and in excessive circumstances disbar auditors for misconduct. In late September the watchdog informed prison prosecutors that EY could have acted criminally. Munich prosecutors are evaluating that evaluation however haven’t launched a prison investigation into particular person auditors’ conduct.

Alexander Geschonneck, a KPMG companion who led a special audit of Wirecard, informed MPs on Thursday that EY ought to have noticed the fraud earlier. “What we did [in the special audit] was not rocket science,” he mentioned. “It wasn’t executed [before by EY].”

Mr Loetscher and three of his former colleagues on Thursday declined to present testimony to the parliamentary inquiry fee into the Wirecard scandal.

Mr Loetscher and Martin Dahmen cited the Apas investigation in opposition to them. Beneath German legislation, witnesses are entitled to stay silent if they’re underneath investigation over the identical matter. The committee accepted that they had grounds to not testify and discharged them as witnesses.

Jens Zimmermann, an MP for the Social Democrats, informed the Monetary Occasions there was specific curiosity within the place of Deutsche Financial institution resulting from its misconduct on numerous issues up to now, including that he really helpful the financial institution ought to “critically replicate on its present set-up” because the lender will probably be audited by Mr Loetscher’s former employer EY from 2021.

Fabio De Masi, an MP for the left-wing Die Linke get together, harassed that the presumption of innocence utilized. “Nonetheless, Mr Loetscher at present poses a really excessive popularity danger [for Deutsche Bank], specifically as his former employer from 2021 will probably be Deutsche Financial institution’s auditor,” Mr De Masi mentioned.

Deutsche Financial institution informed the Monetary Occasions that “we respect working with Andreas Loetscher as a colleague and now we have full confidence in his experience and talent for the job”. Mr Loetscher declined to remark.

Apas declined to remark.

Mr Dahmen’s lawyer mentioned: “We’re satisfied that it’s going to grow to be obvious that Mr Dahmen did meet his skilled duties immaculately.”

EY mentioned that “based mostly on our present state of data, our colleagues carried out the audits professionally and in good religion”.

Two different EY companions — Christian Orth and Stefan Heissner — additionally declined to present testimony to parliament on Thursday. They had been fined €1,000 as MPs determined that Wirecard’s administrator and each boards had lifted the confidentiality necessities. Each will attraction in opposition to the fantastic. They pledged to present full testimony as soon as the authorized uncertainty had been resolved.