German ministries agree on stricter rules after Wirecard debacle. (picture alliance/dpa)
German ministries have agreed on stricter regulations for financial markets and private companies, following a scandal involving the now-insolvent Wirecard company and its dubious accounting practices.
An action plan seen by dpa on Wednesday foresees greater oversight powers for German financial regulator Bafin to combat balance-sheet fraud more effectively.
The government body is to be granted the right to audit all capital market-oriented companies. Currently, it can only carry out special audits of financial institutions - as was the case with the Wirecard Bank AG subsidiary.
The state is also to keep a closer eye on companies with complex international structures, like Wirecard, and auditors at capital-market companies are to change every 10 years under the tougher rules.
Wirecard, a digital payment services provider once listed on the DAX, admitted in June that 1.9 billion euros (2.2 billion dollars) noted in its accounts were likely non-existent, in one of the biggest financial scandals in Germany in recent years.
Public prosecutors in Munich believe that Wirecard had been cooking the books since 2015 and that more than 3 billion euros could be lost.
Bafin and private auditors have both come in for criticism, while Chancellor Angela Merkel and other government ministers have faced questions on how much they knew about the alleged fraud.
Finance Minister Olaf Scholz and Justice Minister Christine Lambrecht are to present the ministries' plan later on Wednesday, the day before a parliamentary inquiry is set to begin into the Wirecard scandal.
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