Warburg Invest managed the fund, Apobank acted as custodian bank.
(Photo: mauritius images / Schoening / Alamy)
Dusseldorf You always meet twice in life, this time with a reminder. In December 2020, Matthias Schellenberg was hired as a board member at the traditional Hamburg bank MM Warburg, in June 2021 he was gone again. Schellenberg has been CEO of Apobank since March 2022. She now has a bill for his old employer: 48.8 million euros.
Apobank is demanding damages from Warburg Holding, the associated companies MM Warburg and Warburg Invest and the main owners Christian Olearius and Max Warburg. Two former managers should also pay. All amounts are called in connection with the cum-ex scandal.
Cum-Ex stands for stock transactions in which securities were traded with (cum) and without (ex) dividends around the distribution date. The parties involved had a capital gains tax that was only paid once reimbursed twice.
The highest German courts have now classified the long-widespread practice as illegal and punishable. All criminal cases ended in guilty verdicts. More than 100 procedures are still ongoing.
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The dispute between Apobank and Warburg revolves around the BC German Hedge Fund. It was initiated by the Ballance Group from London. Warburg Invest managed the fund, Apobank acted as custodian bank.
Prominent investors with big profits
The fund had prominent investors. Drugstore king Erwin Müller invested 50 million euros, Eventim boss Klaus-Peter Schulenberg contributed 30 million euros via a Liechtenstein foundation. Both have made millions in profits at taxpayer expense. They don’t want to know anything about the criminal nature of the cum-ex deals.
Between May and June 2010, securities from 14 German stock corporations worth several billion euros were traded for the fund. Price risks were hedged using derivatives. The gross dividends added up to 185 million euros. The resulting double tax refunds allowed investors double-digit returns.
Crime Podcast: Court Showdown in Cum-Ex Trial
Many others also made good money. In addition to the investment company BC German Hedge Fund managed by Warburg Invest, short sellers, the financing bank Merrill Lynch and the banks that had supplied the short sellers with shares after the reporting date also participated. The well-known tax lawyer Hanno Berger and his partner also advised and settled accounts. There are currently two criminal proceedings against Berger.
As a custodian bank, Apobank was given the task of having a total of 48.8 million euros reimbursed by the Düsseldorf-Altstadt tax office with the help of tax certificates it had prepared itself. When the authority realized that the millions were wrong, they demanded the money back. The problem: the millions were no longer there.
The dual strategy of Apobank
According to court documents, Apobank earned 380,000 euros from the cum-ex transactions. The Düsseldorfers passed on more than 98 percent of the tax refunds to their business partners. The Apobank should pay anyway. The authority turns to the person who illegally had the taxes refunded. She leaves it to Apobank to arrange everything else with her ex-partners.
Bittersweet win
380,000
Euro
according to court documents, Apobank earned from cum-ex transactions.
According to information from the Handelsblatt, the management around CEO Schellenberg is now on two tracks. On the one hand, she has lodged an objection to the decision of the tax office. On the other hand, she submitted a court order against Warburg Invest to the district court in Hagen and paid an advance on court costs of almost 400,000 euros. A spokeswoman for Apobank declined to comment on the matter.
Things won’t be easy. A spokesman for the Warburg Group did not want to comment on the process. However, Warburg Invest itself did not earn a lot of money with the fund business: Fees of a good half a million euros were incurred for the BC German Hedge Fund.
Warburg therefore objected to Apobank’s order for payment. It is also not known from the other former Cum-Ex partners of Apobank that they want to meet the demands from Düsseldorf. The Warburg shareholders would look at Apobank’s advance with great composure, according to those close to them.
The case is currently with the Hamburg Higher Regional Court, which must determine a place of jurisdiction. According to previous judgments, it seems doubtful that Apobank can pass the claim on to other parties. MM Warburg, for example, recently failed with a similar lawsuit against Deutsche Bank.
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