Coba reported suspicions to Wirecard - investigators did not react
In early 2019, Commerzbank had suspicions that something was amiss at Wirecard. The bank reported this to the authorities but was unsuccessful. The bank then considered an exit from financing the corporation. In the end, 200 million Euro were lost.
In the Wirecard scandal, Commerzbank reported financial investigators and regulators about a year before the company's collapse about specific suspicions of criminal activities. However, there was no response from the investigators, as a fraud specialist from the bank testified in the Munich Wirecard trial. The Commerzbank itself also became a victim: Although the bank in Frankfurt wanted to terminate its business relationship with Wirecard, this had not been completed by the Wirecard collapse in the summer of 2020, as the former risk manager Marcus Chromik reported.
When press reports made the bank uneasy, the fraud specialist discovered over 340 suspicious transactions totaling 350 million Euro. For example, she found that 19 Wirecard partner companies all resided in a single Singaporean skyscraper - 111 North Bridge Road - and were all led by the same people, "just in their respective functions." "That was a clue that it could be a web of shell companies," she testified.
In February 2019, the Commerzbank reported these cases to the FIU, the German financial investigative authority. "There was no reaction from the FIU," she reported. The bank then also informed the financial supervisory authority BaFin.
"An exit would have been unique in the history of the bank," Chromik reportedly said as a witness in the Munich Wirecard trial. The bank had been the consortium leader of the 15 banks that had granted Wirecard a common credit facility of up to 1.75 billion Euro. In reality, Wirecard had borrowed around 1.6 billion Euro according to the indictment. After the Wirecard bankruptcy in June 2020, most of the money was lost.
The prosecution accuses the former managing director Markus Braun and his two co-defendants of defrauding the banks. Braun, who has been in pretrial detention for four years, denies all accusation points.
In the executive offices of Commerzbank, the immediate termination of the credit contract was discussed according to Chromik. However, this would not have been legally possible. Given the fact that the Commerzbank had raised suspicions, a sale of the credit commitments would also not have been "trivial," Chromik said. So, the bank decided to exit at the next opportunity to extend the consortial credit - but Wirecard filed for insolvency first.
Auch Chromik noted that at that time in the spring, the Financial Supervisory Authority (BaFin) and the German Justice System were marching in the opposite direction, and instead they were investigating whether Wirecard could be the target of criminal schemes by stock speculators.
"The exit from a DAX-conglomerate would have been unique in the history of the bank," Chromik said. "We didn't know if we weren't completely wrong and then standing as fools at the market."
- Despite reporting suspicions of financial fraud at Wirecard to the Federal Financial Supervisory Authority (BaFin), Commerzbank could not exit its financing of the Dax company due to legal and market constraints, leading to the loss of money.
- The Financial Fraud at Wirecard involved money laundering activities, which were not effectively addressed by authorities, causing significant losses for Dax companies like Commerzbank.
- The Federal Financial Supervisory Authority (BaFin) was focused on investigating potential criminal schemes by stock speculators at Wirecard instead of addressing Commerzbank's concerns about financial fraud and insolvency, further complicating the situation.
- The Wirecard scandal also involved instances of financial fraud being committed against banks, including Commerzbank, leading to substantial financial losses for these financial institutions.
