‘Skandal! Bringing Down Wirecard’ Explained: How Did Germany’s Wirecard Become A Financial Scam?

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“Skandal! Bringing Down Wirecard” brings to the fore the shocking tale of Wirecard, a company hailed as the German alternative to PayPal, only to be found out as a horrible scandal. Given the fact that the case is relatively new, as the Financial Times started to write on it only in 2019, the documentary film does a good job of bringing every piece of information and aspect together to give a compact view of it. Overall, this documentary film is a good watch for anyone interested in documentaries, especially those centered around financial scams.


What Was ‘Wirecard’? How Popular Did It Get?

Founded in Germany in 1999, Wirecard was a payment processor company that quickly rose to fame and popularity as the country’s biggest business in modern times. The German ministers who appear in the film themselves admit how the country had been in a long search for any company that could represent the country in modern times. While IT companies like Google and Facebook were already established as businesses and brands, Germany still had old names like Siemens, Daimler, and BMW to show. It was, therefore, an ideal opportunity for all when Wirecard started to grow as the next financial technology alternative. The CEO, Markus Braun, carried himself in the utmost tech-firm fashion, dressing in a black turtleneck like Steve Jobs himself, and the overall situation of the market enabled Wirecard to become a staple name gradually. With an almost meteoric rise, the company overtook Deutsche Bank in total worth, with an overall figure of over 20 billion euros. Opening itself to the share market, Wirecard also succeeded massively in this space, and the German government too was immensely proud of its new FinTech giants.

While all this was going great for the company, trouble started to brew when a reporter for the Financial Times in London named Dan McCrum looked into Wirecard’s claims with an advanced level of scrutiny. The company claimed that a large share of the market it showed for itself was in Asia, and to McCrum, it seemed like the company was only acquiring more customers by buying smaller companies in Asia. This in itself seemed like a dubious practice for a company of this size, among other findings that suggested that it was basically a money-laundering operation. The journalist got in touch with Braun himself over a telephone interview, and the CEO denied any wrongdoing. Instead, he and Wirecard, for a very long time since then, kept making claims of their own that all this slander was being done by short sellers. His belief was that these individuals, who profit when a company loses value in the share market, wanted the same for Wirecard and were trying to think of their own profits. However, little was known then about the large-scale fiasco that the matter would soon snowball into.


How Did It All Go Wrong For Wirecard?

Other red flags concerning Wirecard also started to show up when another journalist was preparing an investigative piece on the company. After initial reports of the company allowing payments for illegal gambling in the US, it was found that all transactions in the US were facilitated by a company in the UK, and the mentioned address of this company happened to be just a small random house in the English countryside. The resident of this house claimed that a few individuals had offered him a monthly payment only for signing some papers and then posting some letters. After this second article had been prepared, Dan McCrum made mention of it and its contents in an online post, and this itself made Wirecard react through a letter sent by their lawyer to the Financial Times. They had made claims of their own that McCrum was working with short-sellers for his own financial gain. McCrum also felt that he was suddenly being followed around, and a person spying around the Financial Times office was also spotted. Despite all these small setbacks, Wirecard kept going strong, and they even released their prepaid cards to the American market. It was doing great business for the German stock exchange, and Wirecard was soon placed in the DAX index, which holds the 40 biggest companies in the German stock market. Despite this immense growth in numbers and popularity, though, there was always something off with Wirecard as allegations of hacking and information gathering had now started to make their rounds in certain parts of the world. The three major partners that it showed for itself in the Asian market all turned out to be false claims, as addresses of suburban houses and bus company shops were posed as banks working for Wirecard. Despite all these major findings, though, the German administration decided to side with Wirecard and actually made short-selling Wirecard stocks illegal. Along with it, journalists Dan McCrum and Stefania Palma, who had covered the case, were made the targets.

Markus Braun and the rest of the market still did not seem to care much, though, and there was really not too much problem that the company faced until Jan Marsalek stirred up an entire fiasco. Jan Marsalek was the COO of Wirecard for as long as Markus Braun was involved with the company, but there was much more to Marsalek than just that identity. The man had strong connections with a number of high-profile individuals, and he also sometimes got directly involved with critics of the company. In one instance, he had flown into England to sit with a journalist to persuade him to stop writing against Wirecard and had even suggested that he had gone through the reporter’s personal details and bank records. Some still believe that it was actually Marsalek who was conducting these spying operations on McCrum and the Financial Times, or at least, he was the one making it happen. At one point, Wirecard even hired a private detective to pose as an Arab investor who spoke to a short-seller and recorded their conversation about how he knew of the Financial Times’ extensive report on Wirecard that was being prepared. The company then used this as evidence to make claims that the Financial Times was directly attacking it by all dirty means, which did force the news agency to hold on for some time and instead conduct an investigation to prove that they were doing nothing wrong. This, too, was believed to have been Marsalek’s doing, for he was the only one with enough reach and influence to make it possible. Among Marsalek’s close friends and aides were an ex-Austrian secret service member, a former Libyan intelligence officer, and a Russian who was suspected to be a secret-service agent. In fact, the man had also had ties with powerful Austrian ministers in a different project earlier, in which he claimed to have helped restore peace in Libya. But instead, as it was later found out, the man was working indirectly with far-right ministers in European countries to make a deal out of the immigration and refugee crisis for political motives.


‘Skandal! Bringing Down Wirecard’ Ending Explained: What Was The Aftermath? What Happened To Braun And Marsalek?

After the Financial Times successfully came out to prove that they were not engaged in any wrongdoing, they were ready to make the next direct strike and bring Wirecard down once and for all. In a long piece of writing by Dan McCrum and others, it was revealed how Wirecard had basically been a money-laundering program for German gangs and rich individuals, and the names of companies it mentioned as partners did not really exist, or at least did not exist in the capacity that it was claimed. They were also apparently holding on to user data collected from cards and were regularly avoiding audits and regulations. Although Braun maintained that the Financial Times was only tainting the company’s image, an external audit was started by KPMG, and this ultimately led to its downfall. The auditors found a whopping 1.9 billion euros missing from records, as the two banks in the Philippines that Wirecard claimed to have stored the money in, responded that they had no business relations whatsoever with Wirecard. All documents related to this money were fake and forged, and Wirecard could not be saved any longer. Within a very short time, share prices dropped from 104.50 euros to 1.28 euros.

Despite his role as the CEO, some believed Markus Braun to have only been a pawn in the hands of Jan Marsalek, at least for some time before the fraud was committed. Braun himself also claimed the same, saying that he and his team had been duped into committing financial crimes without any idea of it. While Markus Braun was arrested shortly after he resigned from Wirecard, Jan Marsalek was nowhere to be found and had paved an escape for himself using his secret-service influence, and the entire story of Wirecard’s scandal might never have been understood without Marsalek’s account. Dan McCrum was awarded the highest prize for investigative journalism in Germany, and the documentary film has also been adapted from his book on the matter.


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Sourya Sur Roy
Sourya Sur Roy
Sourya keeps an avid interest in all sorts of films, history, sports, videogames and everything related to New Media. Holding a Master of Arts degree in Film Studies, he is currently working as a teacher of Film Studies at a private school and also remotely as a Research Assistant and Translator on a postdoctoral project at UdK Berlin.

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