Financial supervision has taken sides for Wirecard with a ban on short selling.
With the ban on the short sale of Wirecard shares, the German financial supervisory authority BaFin has sided with the Wirecard Group in the opinion of the former Management Board of Wirecard Bank. “For me, the BaFin took sides for Wirecard AG,” said the former board member of Wirecard Bank, Rainer Wexeler, on Thursday in the Wirecard investigation committee in Berlin. With the ban, BaFin apparently wanted to protect the group from attacks by short sellers.
In February 2019, the financial regulator BaFin issued a two-month short sale ban for Wirecard shares. In the case of a short or short-selling, speculators bet on the price of a share falling. This is controversial in Germany. At that time, the procedure was justified with the threat of market uncertainty.
In his questioning before the U Committee in the German Bundestag, Wexeler doubted the influence of Wirecard on international financial stability. With total assets of 2.2 billion euros, Wirecard Bank was by no means a relevant player for the financial system. The core business of Wirecard, the processing of payment services on the Internet, was not relevant. “If that goes away, nothing will happen,” he said. After the company's insolvency, it was seen that competitors were taking over the market.
Wirecard AG granted air bookings of 1.9 billion in June 2020 and then filed for bankruptcy. According to investigations by the Munich public prosecutor's office, it could total more than three billion euros. After the uncovered accounting scandal, Wirecard flew out of the Dax. Because the scandal went undetected for years, BaFin, among others, has come under fire. Former BaFin boss Felix Hufeld had to resign in the wake of the scandal. The Frankfurt public prosecutor's office is also investigating BaFin.
