European policy makers have called on Lithuania to intensify its financial management after the Financial Times revealed that its opponents were suspicious of official fintech imported from the country were used to steal more than 100m Cord, just weeks before the German payroll company collapsed.
Stasys Jakeliunas, MEP of the Lithuanian Farmers and Greens Union, told FT that he hoped the lawsuit, which involved payroll company UAB Finolita Unio, would serve as a “wake-up call” for Lithuanian officials.
“That’s what you should expect,” he said. “Fintech needs immediate and effective oversight, and this is missing from the central bank and the criminal investigation. They are not running alongside these fast-paced, advanced businesses.”
Jens Zimmermann, Germany’s parliamentary candidate for the Social Democrats in Berlin, said competition between EU members to attract fintech to their countries was at risk of “establishing a national hierarchy”.
Wirecard crashed in June 2020 after revealing a € 1.9bn hole in his wallet. Critics in Munich think millions of euros have been taken in the final financial crisis and are closely monitoring the Lithuanian fintech Finolita – based in Singapore, Senjo Group, one of Wirecard’s fraudulent partners.
Criminal authorities estimate that part of the $ 100 million loan, issued by Wirecard in March 2020 to another Senjo Group company and set up by Finolita, was sent to Jan Marsalek, a former Wirecard executive wanted by Interpol.
Opponents are also reviewing € 1.15m from Wirecard to Finolita based on invoices they believe are suspicious.
Jekaterina Govina, director of the financial market management service of the Bank of Lithuania, said Monday that Finolita has been under scrutiny by the country’s largest bank since the “early autumn” 2020.
“The investigation is now underway and elections should be announced soon,” he said, adding that there were “absolutely no trespasses on the theft of money and terrorist money in Lithuania… The country is working hard to prevent it”.
Matas Maldeikis, MP for Lithuania, made the remarks, saying the Bank of Lithuania was “monitoring all financial markets, including fintech companies”. “Lithuania is a good country where fintech companies are welcome, we were one of the biggest beneficiaries of the group after Brexit,” he said.
Sven Giegold, Germany’s MEP at the Green Party, criticized the Bank of Lithuania for not immediately suspending Finolita’s license after being informed of its actions. “The central bank has been making industry policies to support economic activities, rather than overseeing financial institutions.”
“The Finolita case shows that the fintech is not being properly monitored,” Fabio De Masi, a German left-wing MP who serves on the Wirecard Bundestag committee, added.
Elfriede Sixt, Austria’s co-founder of the European Funds Recovery Initiative, a Lithuanian and Estonia-based “economic center for the EU”, where they receive licenses to establish e-financial institutions, donors or cryptocurrency institutions had “become very popular and easy”.
Lisa Paus, Germany’s candidate for the Green Party, said negatives like FBME Bank, Wirecard and Finolita show that the fight against financial crime is a global issue. “Monitoring those who provide the most money, such as those who live in banks, should go to the EU.”
Lithuania’s finance ministry and the European Central Bank, the central bank’s EU regulator, declined to comment.
The German Bundesrechnungshof, the country’s largest intelligence agency, has accused German agencies of misusing the Wirecard case.
“None of the various players – the ministry of finance and justice, BaFin, Deutsche Bundesbank, Financial Reporting Enforment Panel – quickly identified how the case exploded or made the most of their potential,” the agency wrote in a statement to FT. Handelsblatt spoke for the first time about the evaluation of the evaluation agency.