Wirecard’s former chief financial officer Burkhard Ley has denied remaining a part of the German payment group’s inner circle after he retired in 2017, in his first public remarks since the business collapsed four years ago.
Appearing at London’s high court as a witness in a civil case brought by Wirecard’s insolvency administrator, Ley was cross-examined for two days about his credibility, his responsibilities, his memory of events and apparent contradictions in his evidence.
Ley, who denies criminal fraud charges that have been brought against him in Germany for his alleged role in the theft of billions of euros from investors and banks by Wirecard, appeared as a witness for the administrator, who claims the company was itself defrauded of £12mn by Greybull Capital.
The case against Greybull centres on allegations that it misrepresented a 2016 recapitalisation of Monarch Airlines with support from manufacturer Boeing as substantial new investment. Greybull had bought the airline two years previously.
Wirecard was the credit card processor for Monarch. When the airline collapsed in 2017, it was liable for refunds to consumers with booked flights. The case is one of several lawsuits brought by Wirecard’s insolvency administrator Michael Jaffé.
John Wardell, KC, for the defence, questioned Ley about his credibility, citing a German parliamentary report on Wirecard in which former employees described him as part of the group’s “inner circle”, retaining influence after he formally retired. Ley had assumed the CFO role in 2006.
Ley maintains that after he retired from Wirecard, he was a “consultant” dealing only with selected contracts, strategic questions such as “entering the Chinese market”, and “conversations with political decision makers internally and abroad”.
In the civil case against Greybull, Ley testified that a 2016 meeting with Greybull founder Marc Meyohas “was of decisive importance” to the terms extended to Monarch, causing Wirecard to take more financial risk than it otherwise would have done.
He alleged that Greybull characterised funds raised from Boeing as being from a “family investment pool”, implying a greater commitment to support the airline.
Ley spoke in German with simultaneous translation. Wardell challenged Ley’s “narrative” of events in 2016 as “completely inconsistent with what happened and completely inconsistent with your state of mind at the time”.
Much of Wardell’s Monday cross-examination focused on Wirecard loans he said were approved by Ley. “My purpose is to demonstrate that you approved these without conducting any due diligence,” Wardell said, contrasting this to the careful approach to financial risk Ley claimed in relation to Monarch.
He asked Ley about loans made by Wirecard to businesses controlled by James Henry O’Sullivan, an alleged key conspirator in the fraud. Ley said he “did not ride roughshod” over internal concerns about one of the loans after meeting O’Sullivan in Singapore, and that Wirecard had “used internal and external experts” in its lending decision.
From 2016 onwards, Wirecard’s fraud centred on allegedly fictitious revenues attributed to three partner companies, one of which was controlled by O’Sullivan. Wirecard collapsed in 2020 when it was revealed that €1.9bn of cash related to these partner business did not exist.
Ley said, “I was not involved in the creation or accepting of these balances.” He added that while he was CFO, the cash balances associated with those partners were “between €200mn and €300mn”.
A report on the mechanics of the fraud prepared by the administrator bringing the civil case found no evidence of the IT services that Wirecard was supposed to have provided to its partners.
Asked about this, Ley said that arrangement was only from 2018 onwards, after he retired. “There was a completely different contractual co-operation” prior to his departure, he said, adding that “Wirecard’s task was providing customers, not dabbling in IT services”.
Tuesday’s cross-examination focused on Ley’s recollection of events before and after an October 2016 meeting at Wirecard’s offices with Meyohas. In written evidence, Ley said he asked employees to invite Meyohas, because he “wanted assurances about the investment from Greybull” in Monarch.
Wardell presented emails showing Monarch had suggested Meyohas attend, and that the purpose of the meeting was not as Ley described: “I’m afraid I must suggest to you that you are making this up Mr Ley.”
Ley insisted he had made the request, wanting to meet Meyohas because he “had the impression the [Monarch] executive board was not as strong as at other companies”.
Asked about an error in the first line of his witness statement, which incorrectly recorded his title at Wirecard, Ley initially blamed a translation error, but then said he had not properly reviewed the initial paragraphs before signing it.
At times he appeared to contradict himself, saying he did not know O’Sullivan controlled a particular company, then later confirming he did.
Wardell concluded his cross-examination by asking if Ley was aware of a footnote in a Monarch presentation given at the contested meeting, which said “shareholders will secure the funding by monetising off-balance sheet assets”.
The defence argues the existence of that footnote shows there was no intention to conceal. Ley said he had not been aware of the footnote.
Ley has always denied any involvement in the Wirecard fraud, insisting that he was not a trained accountant and relied on the expertise of law firms and other advisers. In December, prosecutors in Munich charged him in with fraud, breach of trust, accounting and market manipulation.
The four-week civil trial in London is scheduled to conclude on July 18.
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