In the judgment of the Bonn Regional Court, the bank was obliged to repay more than 176 million euros.
(Photo: IMAGO/Hanno Bode)
Dusseldorf The public prosecutor’s office in Bonn has suspended the confiscation of 176 million euros from the Hamburg private bank MM Warburg. This was announced by a spokesman for the authorities. The matter will now be reviewed by the Bonn Regional Court. The payment request was sent a few days ago and is based on a criminal judgment by the Bonn Regional Court in proceedings for tax evasion. In this lawsuit against two stockbrokers from London, the Warburg Bank was sentenced to confiscation.
It is about cum-ex transactions, in which the shares involved traded in circles around the distribution date in order to have the capital gains tax paid out twice or even several times. Warburg had acquired the shares and wrongly had the tax on the dividends refunded. The court therefore ordered confiscation.
However, Warburg has now paid the tax for the years 2007 to 2011 to the tax office – albeit after a long period of resistance and with reservations. The bank therefore defends itself against a double burden.
“The collection of taxes ordered by the Bonn Regional Court in March 2020 is now complete,” said a spokesman for Warburg. Now the bank does not have to make any further payments – at least for the time being.
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The spokesman also pointed out that the Warburg Group alone paid the entire tax amount, “although third parties initiated and processed the business and made large profits.” There are already civil law conflicts on this issue about which actors are responsible for which part of the have to pay damages. Warburg is therefore suing other parties involved, such as Deutsche Bank, the broker Icap and the lawyers involved.
There are new legal issues to be resolved
Much is also unclear in terms of criminal law. In addition to the Warburg Bank, the public prosecutor’s office in Bonn has also asked one of the convicted stock traders to settle his debt to the German judiciary. He was sentenced to pay 14 million euros, of which he transferred three million in advance.
The Bonn Regional Court initially took the view that the state should not overcompensate for the tax damage. The Federal Court of Justice (BGH) followed this in its first judgment. However, in a second decision, the BGH made it clear that in addition to the capital gains tax – i.e. the spoils of the crime – commissions, fees and other profits are also to be collected.
These do not come “from the deed” but were paid “for the deed”. This is where the law sees the decisive difference. As a result, the tax authorities would get back the illegally refunded taxes and the judiciary could collect the cum-ex profits at the same time.
More: The half-hearted confession of the accused Hanno Berger