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BaFin warned by Commerzbank about Wirecard in early 2020, FT reports

Wednesday 13 January 2021 14:00 CET | News

Commerzbank has warned Germany’s financial watchdog, BaFin, about money laundering risks at Wirecard in early 2020, according to Financial Times.

The assessment the German bank offered BaFin in January 2020 was based on the findings of an internal review Commerzbank began into its relationship with Wirecard in early 2019, FT cited three people familiar with the matter.

In 2015, Commerzbank and Deutsche Bank helped fund Wirecard’s acquisition of two Indian payments companies that were referred to in the fraud allegations against the group, FT adds. The role Commerzbank played in this transaction had been presented to BaFin in a detailed presentation at a meeting on January 14, 2020, according to people familiar with the matter.

The bank also informed the regulator of suspicious transactions by clients at Wirecard Bank, for which it processed cross-border payments. In response, BaFin concluded that there was ‘no immediate regulatory reason to act’ as it was already aware of most of the issues raised by Commerzbank, the people added.

The conclusions of the review prompted Commerzbank to begin to sever business ties with the payments group in the second half of 2019. However, the German bank remained part of a consortium of 15 banks that provided Wirecard with a EUR 1.75 bn revolving credit facility.

Commerzbank wanted to terminate its lending relationship with Wirecard following its review, but the contract prevented an early exit from the consortium, which had committed the credit line until 2024, according to people familiar with the matter.

In a statement, Commerzbank said there is a separation between the work of its analysts and other parts of the bank. It declined to comment further on its relationship with Wirecard, FT added.

All in all, citing Fabio De Masi, an MP from the hard-left party Die Linke, FT concluded that the bank’s internal review and warning to BaFin ‘undermine the view’ that the German government and Wirecard’s business partners were ‘powerless concerning Wirecard’s criminal intent’.

BaFin confirmed in a statement to the FT that it had been briefed by Commerzbank about money laundering risks at Wirecard. The German watchdog added that it had already put Wirecard Bank’s anti-money laundering controls under close supervision in mid-2019.


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Keywords: Wirecard, BaFin, Commerzbank, anti-money laundering, AML, accounting fraud, payments, cross-border payments, banking, PSPs, fintech
Categories: Banking & Fintech | Payments General
Countries: Germany
This article is part of category

Banking & Fintech