‘Do you understand what I say?’ Markus Braun’s stonewall testimony tests patience of Wirecard judge

In his two and a half years in police custody, Markus Braun seems to have changed very little.

The former Wirecard boss still wears his black turtlenecks. He is as self-confident, polite and intransigent as ever. His statements in the trial in Munich examining one of Europe’s biggest accounting frauds have been peppered with PowerPoint presentations and industry jargon. They have often sounded more like investor briefings than statements in a criminal case.

Braun’s testimony ended last week. Dozens of other witnesses are lined up to appear in proceedings that are expected to last until mid-2024 at the earliest, but the 53-year-old is the central figure in the case.

Together with two former colleagues, he faces charges of fraud, embezzlement and market and accounting manipulation. If found guilty on all counts, he could be sentenced to up to 15 years in jail.

Yet in hour after hour of court time since mid-February, he has remained remarkably unfazed, always denying any wrongdoing in a firm but affable manner. “I want to be very precise here,” he has said. He has even appeared to enjoy some of the conversation with presiding judge Markus Födisch, answering questions politely, patiently and often with a smile.

All the way through, he has been unwavering in his position. He has also retracted the few admissions of accountability he made to prosecutors during the early stage of the investigation back in 2020.

In his opening statement at the trial, he said that the day of Wirecard’s collapse was a “day of deepest regret and pain” but has not said since what it is that he is regrets. The fraud, he is adamant, was orchestrated entirely without his knowledge and involvement.

Instead, he has blamed Wirecard’s fugitive second-in-command, Jan Marsalek, as well as former Dubai-based manager Oliver Bellenhaus. The latter is one of the three defendants in the case but he has turned chief witness and has implicated Braun heavily.

The third defendant, Wirecard’s former head of accounting Stephan von Erffa, also denies all wrongdoing.

Braun disputes even the most basic facts of the case. After long investigations, Wirecard’s administrator and criminal prosecutors maintain that the payment company’s outsourced operations in Asia, which on paper accounted for half the company’s revenue and €1.9bn in corporate cash, were a sham. Braun is insistent that these operations did very much exist.

His version of events is that Marsalek and Bellenhaus created a “shadow structure”, hijacking payments processing by Wirecard and embezzling its returns, tricking the company’s management as well as its auditors.

Braun has presented emails and chat messages as well as bank statements and other documents that he considers “hard facts” that prove his point. The judge has called Braun’s arguments a “theory” based on “your interpretation of the facts”. 

The former chief executive has also depicted himself in court as someone who came close to uncovering and stopping the fraud. He argued, for instance, that it was he himself who pushed for a forensic KPMG audit in October 2019 after a Financial Times article raised questions about the existence of key clients and that he decided to replace Marsalek in early 2020 in response to the latter’s behaviour during the KPMG audit.

At one point, Födisch appeared to stump Braun with a simple question: if the outsourced operations had existed, why did Marsalek and Bellenhaus need to forge minutes of meetings and databases, as well as client and transaction data? “Would it not have been much easier just to take the cash?” the judge asked.

For once, Braun was flustered and struggled to come up with a clear explanation, arguing — in contradiction with other evidence and witness statements — that the only documents that had been forged were balance confirmations.

This apart, Braun’s generally immovable position sometimes seemed to test the judge’s patience. At one point, Födisch asked him: “Do you understand what I say?” On another occasion, he commented to Braun that “you have just said with very many words the same as before: nothing”. After Braun dismissed several witness statements as untrue, the judge said: “Here are three accounts which all clearly contradict you. Do you really want to claim that they are all entirely made up?” 

Braun’s response was that the witnesses were just saying what they thought the investigators wanted to hear.

The judge challenged Braun a number of times on why he did not do more to investigate internal and external warnings and signs of trouble from whistleblowers, auditors, short sellers and media reports.

“From the outside, it looks like the situation was escalating more and more. I want to comprehend why you did not get involved personally,” Födisch asked, after Braun said that any allegations were always investigated “by the responsible departments” at Wirecard.

Födisch also asked repeatedly why Marsalek, who was in charge of the outsourced operations, was in effect answerable to no one almost until the company collapsed — a view that Braun rejected.

The judge read the court a statement Braun gave to prosecutors in December 2020, six months after Wirecard collapsed. At that time, he acknowledged he had “failed” as chief executive and had to accept responsibility for what had happened because he did not “see the iceberg coming”.

“This is more than you have told us,” the judge commented after he had finished reading the statement out.

Braun responded that he was emotionally distressed at the time, after six months in police custody, and also lacked access to the prosecutor’s files.

Pushed by the judge to say whether he still thought he had failed, Braun reverted to the mathematical language of his doctorate in business informatics. “I did not solve the equation properly. In this sense, I failed.”