Topline
A Singapore court on Tuesday handed two former employees of Wirecard Asia prison terms for their role in the widespread fraud and misappropriation of funds that led to the once high-flying firm’s spectacular crash, the first criminal convictions linked to the scandal as prosecutors continue to close in on those connected with the scheme.
The criminal convictions are the first related to the Wirecard accounting scandal.
Key Facts
James Aga Wardhana and Chai Ai Lim were respectively sentenced to 21 months and 10 months in prison in Singapore for their role in the widespread fraud going on at German payments firm Wirecard, according to news reports.
Wardhana and Lim were both senior finance executives at Wirecard Asia Holdings and charged in connection with the scheme in 2022.
The court said the sentences, handed down for conspiring to misappropriate funds, come into force with immediate effect.
Deputy public prosecutor Vincent Ong said the two former executives were actively involved in the fraud at Wirecard and “not merely the proverbial arms and legs of the scheme,” Bloomberg reported.
The sentences mark the first criminal convictions related to the Wirecard scandal around the world.
Key Background
Payments firm Wirecard was a darling of Germany’s tech industry until it collapsed spectacularly in 2020 after acknowledging around $2 billion of assets it listed on its books probably didn’t exist. The missing money formed a sizable portion of the company’s accounts and the accounting scandal, “unparalleled” in post-war Germany, ultimately sank the firm. The company’s Asian division was key to maintaining Wirecard’s deception.
What To Watch For
Prosecutors are still pursuing those involved with the fraud scheme, notably former CEO Markus Braun. A verdict on Braun, who has been in custody since 2020 and denies wrongdoing, is not expected until at least 2024, according to Reuters.
What We Don’t Know
A former Wirecard executive who is thought could shed considerable light on the company’s doings is Jan Marsalek, who the Financial Times describe as the scheme’s “suave and enigmatic mastermind.” Officials have been unable to find Marsalek—he is on Europe’s most wanted fugitives list—and his precise whereabouts are unknown. Intelligence agencies reportedly believe he is living in Moscow.
Further Reading
Two Ex-Wirecard Asia Employees in Singapore Get Jail Time (Bloomberg)
Wirecard: a record of deception, disarray and mismanagement (Financial Times)
Source: https://www.forbes.com/sites/roberthart/2023/06/20/first-criminal-convictions-for-wirecard-fraud-scandal-handed-down-in-singapore/