By John O'Donnell and Christian Kraemer
FRANKFURT (Reuters) - Chancellor Angela Merkel will be asked by German lawmakers on Friday why she lobbied for payments company Wirecard just months before it collapsed in the country's biggest post-war fraud.
Merkel's appearance will mark the climax of a public inquiry into an affair that has tainted Germany's reputation for rectitude, exposed ties between politics and business and prompted resignations and criminal investigations.
The government has said that Merkel did not know at the time of the irregularities at Wirecard, which has since been dismantled after its disclosure of a 1.9 billion euro ($2.3 billion) financial hole triggered its insolvency.
Wirecard, which began by processing payments for gambling and pornography, had been hailed as a rare German technology success story, although few really understood it. Once valued at $28 billion, it abruptly unravelled last year.
Lawmakers say that the German government was biased in favour of the company, turning a blind eye to allegations of irregularities in the run up to its collapse.
Parliamentarians will ask Merkel why she brought up Wirecard's planned takeover of a company in China during a state visit in September 2019. A senior official in her office had also pledged further support to Wirecard.
"The Chancellor lobbied for Wirecard with the most powerful man in China," said Fabio De Masi, one of the lawmakers leading the public inquiry, asking why she gave it such priority.
In power since 2005, Merkel remains popular, although her legacy, such as her 2015 decision to open Germany's borders to refugees fleeing war in the Middle East, divided opinion.
The Wirecard debacle tarnished her government's reputation by shining a spotlight on the lengths some German politicians have gone to in order to support companies.
Stephan Klaus Ohme of Transparency International said had it exposed cracks in Germany's laissez-faire model towards industry, leaving companies largely to their own devices.
"In Germany, you should stick to the rules but if you don't, nothing happens. The penalties are laughable," he added.
