FT says German criminal probe into journalist is ‘smokescreen’ for alleged fraud at fintech firm reported by paper

The Financial Times has said allegations of unethical reporting over its investigation into claims of fraudulent accounting at a German fintech company are a “smokescreen” obscuring its public interest journalism.

In stories published since 30 January, the FT has reported claims of “book-padding” at the Asia-Pacific operations of Wirecard, a Munich-based electronic payment services company.

Wirecard has said it “firmly rejects” the allegations.

The FT, usually behind a hard paywall, has made most of its recent stories about Wirecard free to read because of what it claims is their “significant public interest”.

But, it emerged this week that public prosecutors in Munich have launched an investigation into market manipulation relating to a member of FT staff.

A spokesperson for the Munich prosecutor told Press Gazette they had “initiated a preliminary investigation against a journalist of the Financial Times based on a criminal complaint of an investor several days ago”.

The FT said in a statement responding to the probe: “Any allegation against the FT or any of its reporters or staff of market manipulation or unethical reporting in relation to Wirecard is baseless and false.

“It is a smokescreen obscuring the serious allegations that were revealed by the FT.

“Our reporters have been investigating this company for four years, and in the last month published stories based on credible evidence of fraudulent accounting detailed in internal documents seen by the FT.”

The newspaper said it has not been contacted by either the Munich prosecutor or German financial regulator, and that any investigation “would therefore appear to be at the very earliest stage”.

The FT added that Wirecard’s response to the stories had always been published alongside the allegations.

After the FT published a story on 7 February, headlined: “Wirecard: inside an accounting scandal”, the Munich-based company said it was “taking legal actions against FT and its unethical reporting”.

It said that “nothing” about the February article was true.

The company also said its employees had been “slanderously prejudged with unproven and false allegations” and that it would “use all available legal means to protect the company and in particular our employees and their personal rights”.

Wirecard said the allegations reported by the FT “have been investigated in a professional compliance process by both our internal compliance team and an independent law firm specializing in compliance (Rajah and Tann)”

It said in a statement earlier this month: “Neither the internal investigation by our compliance department has confirmed the allegations, nor has Rajah and Tann’s external investigation so far resulted in conclusive evidence of criminal misconduct by employees or executives.”

The firm said it would announce the results of the external investigation “in due course”.

The Munich prosecutor’s spokesperson said there was not “any sufficient initial suspicion” to initiate a preliminary investigation into Wirecard itself.

Meanwhile, the German financial regulator has banned the short-selling of Wirecard shares, citing a “serious threat to market confidence”.

Wirecard’s shares have dropped as a result of the FT’s reporting.

The post FT says German criminal probe into journalist is ‘smokescreen’ for alleged fraud at fintech firm reported by paper appeared first on Press Gazette.

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