Karl-Theodor zu Guttenberg testifies before the Wirecard parliamentary committee in Berlin on Thursday © Michele Tantussi/AFP/Getty

One of Wirecard’s leading advisers has defended his lobbying activities for the disgraced payments company, telling German MPs that it had “deceived us all”.

Karl-Theodor zu Guttenberg, the former German defence minister, said he had been “completely surprised” by the collapse of Wirecard in the summer. “If we’d known that its business model was apparently based on fraud we would never have advised this Dax company,” he said.

Mr zu Guttenberg, whose questioning lasted more than five hours, was speaking before a parliamentary inquiry into the fall of Wirecard, the worst accounting scandal in Germany’s postwar history.

The company, whose shares were once traded on the Dax index, admitted in June that €1.9bn in cash was missing from its accounts. Within a week it had collapsed into insolvency.

This autumn the Bundestag launched a full inquiry into the affair, which will look at why the German authorities failed to detect the fraud. Another focus is the close connections between Wirecard and former and serving politicians who lobbied for the company as it sought to expand its activities abroad, and especially in China.

MPs are particularly interested in a meeting between Mr zu Guttenberg, now the chairman of advisory firm Spitzberg Partners, and the chancellor Angela Merkel on September 3 last year. The former minister brought up Wirecard, saying Spitzberg was advising the company on its acquisition of a Chinese payments group, Allscore Financial. To seal the deal it required the approval of the regulator, the People’s Bank of China, and he asked for Ms Merkel’s help.

Mr zu Guttenberg said he had no suspicions about Wirecard at the time and, if he had, would “never have risked” his relationship with the chancellor by lobbying for the company. He said Ms Merkel did not immediately promise her support, saying she would refer the matter to chancellery experts. A few days later, while on an official trip to China, she did indeed bring up Wirecard and its planned acquisition.

Mr Guttenberg defended the government’s lobbying for the payment processor, saying all German companies trying to enter a market as heavily regulated as China’s are “reliant on political support”.

Mr zu Guttenberg said he had frequently asked Wirecard management about articles published in the Financial Times alleging accounting irregularities at the company. He said executives referred to the fact that German prosecutors were investigating the FT journalists over their articles, and pointed to the unqualified audits issued by Wirecard’s auditors EY. “They assured us there was nothing to [the allegations] and it was just a targeted smear campaign”, he said.

Mr zu Guttenberg said he had often asked himself whether he had been “thoughtless” in believing Wirecard, and come to the conclusion that he had not. He said the German financial regulator, sellside analysts from major banks and renowned investors had also been taken in by the company. “Apparently, we were deliberately deceived,” he said.

Danyal Bayaz, a Green MP, said Mr zu Guttenberg’s testimony “once again shows how badly we need clear rules for lobbyism and transparency”. “It’s in the government’s own interests, to protect them from self-inflicted, negligent or even wilful ignorance.”

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