Commerzbank’s Heike Pauls was one of the more bullish analysts covering Wirecard © FT montage; Bloomberg, Reuters

Commerzbank suspended coverage of companies tracked by its former Wirecard analyst after it emerged on Thursday that she had briefed executives of the disgraced payments provider about criticism that a hedge fund had shared with her.

The Commerzbank analyst, Heike Pauls, was one of the more bullish among those covering Wirecard, which collapsed last June in one of Germany's biggest postwar accounting frauds.

In December 2016, Ms Pauls shared information gathered during a call with Greenvale Capital, a London-based hedge fund, with Wirecard’s then chief financial officer Burkhard Ley and Iris Stöckl, who was the group's head of communications.

In the email sent to the executives by Ms Pauls, and seen by the Financial Times, she said that the hedge fund believed Wirecard’s story was “too good to be true” and that “not all but most of” its business must be fake.

Asking Mr Ley and Ms Stöckl to treat her email as confidential, Ms Pauls said: “It is important to me that you get an impression of what is currently being discussed on background.”

Despite growing scrutiny of Wirecard’s performance and business in the years before its collapse, the formerly high-flying company remained a favourite of many analysts and investors.

In early 2019, Ms Pauls published a research note in which she described a Financial Times report, into allegations over accounting manipulation at the company’s Asian business, as “fake news”. Commerzbank later retracted that report and apologised for the wording.

Wirecard targeted some critics in spying operations and subjected them to hacking attacks.

The move by Commerzbank to suspend its coverage of Ms Pauls’ companies, which include Deutsche Telekom, comes as Germany’s parliamentary inquiry into Wirecard’s failure focuses on the payment group’s relationship with the country’s banks.

Testifying to the inquiry on Thursday, Commerzbank’s chief risk officer Marcus Chromik told MPs that he had only learnt about Ms Pauls’ email after it was reported by Der Spiegel hours earlier.

“I felt some astonishment about what I read,” he told MPs.

In a brief note to clients later on Thursday, Commerzbank announced that its coverage of 10 technology, telecom and media companies, all covered by Ms Pauls, had been suspended “due to reallocation of analyst resources”.

Germany’s second-largest listed lender stressed that the move should not be viewed “as a reflection of Commerzbank’s views on these companies.”

In the email, Ms Pauls wrote that Greenvale Capital had observed that Wirecard had implausibly high profit margins and that much of its business was opaque.

She also noted that executives at the hedge fund “claimed that I was the first analyst at all who ever came across a Wirecard payment platform on the internet,” before adding that “I told them to order a good bottle of wine at Lidl Online and see for themselves.” Lidl was one of Wirecard's clients at the time.

A Commerzbank spokesperson told the Financial Times that an internal investigation into the bank’s relationship with Wirecard was ongoing and declined to comment further.

Ms Pauls did not respond to a request for comment.

Get alerts on Wirecard AG when a new story is published

Copyright The Financial Times Limited 2021. All rights reserved.
Reuse this content (opens in new window)

Comments have not been enabled for this article.

Follow the topics in this article