Germany's proudest technology company was worth more than Deutsche Bank. Then somebody asked two banks a simple question.
Harder version: read this lesson at C1 level →
Look at each word. Say what you think it means. Then tap the card.
Tap a card to see the meaning.
Write one word from the cards in each gap.
1. The police are still the accident.
2. He taking the money, but nobody believed him.
3. My sister is an and works for a large firm in Berlin.
4. There is no that he was in the building that night.
5. The old bridge after the storm.
6. She works as a for a local newspaper.
1. investigating · 2. denied · 3. accountant · 4. evidence · 5. collapsed · 6. journalist
Read each part. Then answer the questions before you read the next part.
Wirecard started in the late 1990s. It processed payments on the internet, for businesses that ordinary banks did not want to talk about.
Slowly it became respectable. It got a banking licence. It got famous customers. And it had a perfect story for its moment.
Germany is an industrial superpower, but it was embarrassed: it had almost no big technology companies. Now here was a German company, near Munich, winning the world's payments business.
Its chief executive, Markus Braun, dressed and spoke like a Silicon Valley boss. He promised big growth every year. On paper, he delivered it every year.
Where did the profit come from? According to the accounts, from partner companies in Asia. In countries where Wirecard had no licence, these partners processed payments for it. The money was said to be sitting in special accounts in the Philippines.
Look carefully at that structure. The company's most profitable business was in other people's companies, in other people's paperwork, in other people's banks.
In 2018 Wirecard reached the top. It entered the DAX, the list of Germany's thirty most valuable companies, and pushed out Commerzbank — a technology company replacing an old bank.
At its highest point it was worth about twenty-four billion euros: more than Deutsche Bank. Politicians promoted it on foreign trips. Investment funds had to buy it.
And all that national pride had quietly become part of the company's defences.
True or false? Click your answer.
1. Wirecard was a German company that processed internet payments.
2. Most of its profit came from its own offices in Germany.
3. In 2018 it was worth more than Deutsche Bank.
The extraordinary thing about this fraud is that it was not really hidden. It was published, in a famous newspaper, for years.
From 2015, a Financial Times journalist called Dan McCrum wrote a series of articles about false numbers and strange accounting. Investors who were betting against the company circulated detailed reports. In 2018, employees in Wirecard's own Singapore office reported forged contracts, and the police raided the office there.
Every time, the company did the same four things. It denied everything. It said the journalists and the investors were criminals working together. It went to court. And it announced more growth.
Then came the part that Germany still finds painful.
In February 2019, the German financial regulator did something it had never done before. It banned people from betting against this one company's shares — protecting Wirecard — and it made criminal complaints against the Financial Times journalists.
Think about what that meant. A national regulator had decided that the most likely explanation for detailed evidence of fraud was that a major newspaper was lying.
Meanwhile the accountants had approved the accounts every year for a decade. For the billions in the Philippines, they had relied on documents and letters — they had never gone to the banks themselves and checked that the money was there.
True or false? Click your answer.
1. The story was secret until 2020.
2. The German regulator investigated the journalists.
3. The accountants checked directly with the banks that the money existed.
Under pressure, Wirecard asked a different firm, KPMG, to do a special check. Their report came in April 2020. It was written in careful, polite language, but the meaning was terrible: for the business that produced most of the profits, they could not confirm that it existed.
Then the end came very fast.
In June 2020 the accountants finally did the obvious thing. They asked for direct confirmation from the two banks in the Philippines that were holding the 1.9 billion euros.
The banks replied that the documents were forgeries and that the accounts did not exist. There was no money. There had never been any money.
On 18 June, Wirecard announced that 1.9 billion euros "probably do not exist". Braun resigned and was arrested within days.
Jan Marsalek, the director responsible for the Asian business, took a private plane out of Austria and disappeared. Reports say he travelled through Belarus into Russia. He is still on Europe's most-wanted list.
One week after the announcement, Wirecard went bankrupt — the first company ever to collapse out of the DAX, about two years after joining it.
Ordinary German savers lost money, because funds that follow the DAX had been forced to own it until days before the end.
Now look at the whole story. On one side: a company that insisted and denied, accountants who confirmed, and a regulator that attacked the critics. On the other: journalists who alleged, employees who reported, and investors who bet against it.
Everyone with official authority pointed one way. Everyone with money at risk and no national pride to protect pointed the other.
And the evidence that ended it was one letter from two banks. Anybody could have asked for it in any of the previous six years.
True or false? Click your answer.
1. The 1.9 billion euros was found in a different bank.
2. Markus Braun was arrested after the announcement.
3. The decisive evidence was very difficult and expensive to obtain.
This story is about who said what, and who believed them. To retell it you need the three reporting verbs that English students mix up most often.
say — no person after it. → "The company said that the money existed." / "He said to me that…"
tell — always a person after it. → "The journalist told his editor the truth." (NOT told to his editor)
ask — for questions and requests. → "They asked the banks a question."
The one rule to remember: tell needs a person; say does not. tell somebody something · say something (to somebody).
Also useful here: deny + -ing → "He denied knowing about it." And refuse + to → "They refused to answer."
| Verb | Pattern | Example |
|---|---|---|
| say | say (that) + sentence | He said that the money existed. |
| tell | tell + person + (that) | He told the board that everything was fine. |
| ask | ask + person + question | They asked the banks for confirmation. |
| deny | deny + -ing | He denied doing anything wrong. |
| refuse | refuse + to + verb | They refused to explain the accounts. |
Write said, told, asked, denied or refused.
1. The company that the journalists were criminals.
2. The banks the accountants that the documents were forgeries.
3. The accountants finally the banks for direct confirmation.
4. Braun doing anything wrong.
5. For years, the company to explain where the money was.
1. said · 2. told · 3. asked · 4. denied · 5. refused
Each sentence has one mistake. Say the correct sentence out loud, then check.
1. He said me that everything was fine.
2. She told that the money did not exist.
3. The journalist asked to the bank a question.
4. He denied to know anything about the fraud.
5. The regulator refused believing the newspaper.
1. He told me that everything was fine. (or: he said to me)
2. She said that the money did not exist. (tell needs a person)
3. The journalist asked the bank a question. (no to after ask)
4. He denied knowing anything about the fraud. (deny + -ing)
5. The regulator refused to believe the newspaper. (refuse + to + verb)
Take your time. Short sentences are fine.
Tell me the story of Wirecard in your own words. Six or seven sentences is enough.
Tell me about a time you were right and nobody believed you.
What happened in the end?
Put these in order of how much you trust them: a newspaper, an accountant, a government regulator, a company's own boss.
Explain your order.
Germany wanted a technology champion very badly. Did that make the fraud easier?
Is national pride dangerous in business?