Berlin – The German government plans to reform legislation on financial compliance following the demise of Wirecard, which failed to account for 1.9 billion euros (2.1 billion dollars) in assets.
A “competent, effective and efficient financial reporting procedure” is important in order to ensure a functioning and transparent capital market, a spokesman for the Justice Ministry said on Monday.
The ministry is working together with the Finance Ministry in order to assess the scope of the necessary reform, he added.
Wirecard began insolvency proceedings after the massive hole in its accounts emerged, sending its share price into free-fall.
The funds were meant to have been held in accounts in South-East Asia, but it is now thought that these accounts never existed.
The German Financial Reporting Enforcement Panel (DPR), organised under private law, conducts financial compliance checks on behalf of the state.
Deutsche Boerse, which runs the DAX stock market that lists Germany’s 30 top companies, has also promised regulatory reforms in response to the scandal.
“Trust in the capital market has obviously suffered in the past few days. As a marketplace operator, it is also our task to strengthen confidence in the capital market,” the operator said on Monday, promising “an in-depth review and revision” of its rules and regulations.
Wirecard, which provides digital payment and e-commerce services, joined the DAX top league in September 2018.
The composition of the index is reviewed quarterly, with the next review set for September.