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FirstFT: Ex-Wirecard accountant admits forging documents for KPMG

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Wirecard’s ex-head of accounting has admitted to forging documents requested by KPMG during a special audit, ahead of a trial that is set for later this year, according to people familiar with the matter.

Stephan von Erffa is one of three defendants charged with fraud, breach of trust and market manipulation in a case brought by Munich prosecutors over the spectacular downfall of one of Germany’s highest-flying technology companies.

Wirecard crashed into insolvency in June 2020 after admitting that half of its stated revenues and €1.9bn of corporate cash purportedly held in escrow accounts in Asia did not exist.

Von Erffa denied any involvement in the wider fraud and blamed Wirecard’s fugitive second-in-command Jan Marsalek during a parliamentary inquiry into the scandal last year. However, the police investigation found evidence that von Erffa forged documents in early 2020 that were then shared with auditors at KPMG and EY.

The 47-year-old is the first senior Wirecard executive to admit wrongdoing since Oliver Bellenhaus, head of a Dubai subsidiary, turned himself in to authorities in July 2020 and turned chief witness for the prosecution. Von Erffa, Bellenhaus and former chief executive Markus Braun, who denies wrongdoing, are set to face trial this year.

Thanks for reading FirstFT Asia. Here’s the rest of today’s news. — Sophia

1. Beijing silent over Xi’s brush with Covid-19 in Hong Kong A Hong Kong lawmaker has sparked concerns over the health of Xi Jinping after testing positive for Covid-19 just two days after his meeting with the Chinese president. Xi’s brush with Covid-19 comes as lockdown measures and mass testing are reintroduced in the east of China following a new outbreak of cases.

2. UK politicians raise alarm over Chinese CCTV providers MPs and peers from across the political spectrum have called on prime minister Boris Johnson to ban the sale of surveillance equipment in the UK from Chinese companies Hikvision and Dahua, which have already been blacklisted by the US over Beijing’s use of their equipment in the repression of Uyghur Muslims in China.

3. US concludes unintentional Israeli fire killed Al Jazeera journalist The US state department said that Palestinian-American Al Jazeera journalist Shireen Abu Akleh was probably shot by Israeli defence forces. The report comes a week before US president Joe Biden’s Middle East trip.

4. Germany warns of ‘historic challenge’ as trade slides into deficit Soaring energy prices and disrupted trade have pushed the country into a $1bn monthly trade deficit — the first since 1991. Economists expect Germany to enter a recession this year, with difficult years of recovery ahead.

5. Abducted Canadian billionaire faces trial in Shanghai Missing tycoon Xiao Jianhua faced a Shanghai courtroom, more than five years after the enigmatic dealmaker was snatched from Hong Kong’s Four Seasons hotel by Chinese security guards. He faces charges related to fraud after his Tomorrow Group collapsed following a debt-fuelled acquisition binge.

The day ahead

PMI data China, France, Germany, Italy, the UK and the US markets will see purchasing managers’ index data from the services sector. The eurozone S&P Global composite for manufacturing and services will also release PMI data today.

Cannes Film Festival The 75th annual Festival de Cannes opens today, celebrating the best of artistic cinema.

Paris Fashion Week Haute couture week begins today for the autumn/winter season in Paris.

Independence Day Algeria and Venezuela both celebrate their independence today.

Workers on strike Staff at washing machine maker Whirlpool will be balloted for strike action today over what the union bosses have called an “insulting” pay offer.

What else we’re reading

Global inflation: Japan faces a moment of truth The Bank of Japan’s decades-long ultra loose monetary policy is under increasing pressure from rising global inflation. Analysts say the yen — and Japan’s economy — stands at a critical juncture with two starkly different outcomes, depending on the central bank’s next steps.

Erdoğan is an infuriating but indispensable ally Turkish president Recep Tayyip Erdoğan’s move to blackmail Nato over Finland and Sweden’s admission raises uncomfortable questions for the rest of the global alliance at a time when western resolve is already being tested.

Time to change my subscription model As we slog through subscription fatigue in a market saturated with monthly membership fees, Robert Shrimsley investigates his personal ecosystem of deliveries, streaming services, newsletters and other reoccurring payments. No longer, he vows, will he fall into the demographic that’s interested enough to sign up but too stupid to cancel.

‘The thing that really works for Trump is: the system’s rigged’ Michael Lewis, one of the greatest chroniclers of America’s financial crisis, takes aim at Donald Trump and the US response to Covid-19 in an interview with the FT’s chief features writer Henry Mance.

Pop-up leaders and flexible staff are ready for a new crisis The entire workforce has just taken a global stress test in double-digit inflation and economic recession. Now, senior managers are more prepared to tackle upheaval than executives appreciate, writes Andrew Hill.

Books

Rare books command huge prices. It’s not easy to profit from “priceless” books on the black market — but it doesn’t stop thieves from trying. From high-tech heists to antiquarian crime rings, the literary underworld would make a gripping novel of its own.

a cartoon library scene with a number of masked burglars
© Illustration by Uijung Kim

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