Deutsche Bank executive steps aside over Wirecard allegations

Former EY partner Andreas Loetscher is temporarily stepping aside as Deutsche Bank's head of accounting after Munich prosecutors last week launched a criminal investigation into potential violations of professional duties during Wirecard audits.

In an email to staff seen by the Financial Times, Germany's largest lender on Tuesday night announced that Brigitte Bomm, global head of tax, would replace Mr Loetscher with immediate effect, stressing it expected that this change would be "of a temporary nature".

Deutsche Bank confirmed the authenticity of the memo and declined to comment further.

Mr Loetscher joined Deutsche Bank in 2018 after more than two decades at EY. From 2015 to 2017, he was one of the lead auditing partners in charge of the Wirecard mandate.

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James von Moltke, Deutsche’s chief financial officer, told staff on Tuesday night that Mr Loetscher’s temporary replacement was taken “at Andreas’ request and in mutual agreement”, stressing that “this step is neither an acknowledgment of wrongdoing by Andreas nor a change of perception on the part of the bank”.

Probe

Wirecard, a once high-flying German payments firm, collapsed this summer in one of Europe’s biggest postwar accounting frauds after it disclosed that €1.9 billion of corporate cash did not exist.

Germany’s audit watchdog Apas, which is probing Mr Loetscher along with several other EY partners, in late September told Munich prosecutors that the Big Four firm may have acted criminally.

Apas suspects that EY partners knew they were issuing “factually inaccurate” audits for Wirecard in 2017 and 2018. If proved, this can be punished with up to three years in jail under German law.

EY Germany has repeatedly rejected allegations of wrongdoing.

Mr von Moltke said that Deutsche Bank “value Andreas highly as a colleague and have full confidence in his expertise and abilities”.

Mr Loetscher will work as a senior adviser to Ms Bomm and will remain a member of the lender’s finance leadership team. – Copyright The Financial Times Limited 2020