Another crackdown on the Cum-Ex tax scandal. This time the German branches of the investment bank Natixis are being searched.
(Photo: dpa)
Dusseldorf Around 60 public prosecutors, tax investigators and police officers have been searching the Frankfurt and Munich branches of the French investment bank Natixis since Tuesday. “The measures are related to cum-ex transactions that are the subject of the proceedings and related tax evasion models,” said a spokesman for the Cologne public prosecutor’s office, which is in charge of the investigation.
The investigations are said to cover the years 2007 to 2015 and, according to the public prosecutor’s office, are aimed at four suspects. “The searches serve in particular to find relevant communication in the form of e-mails and other written correspondence,” said the spokesman for the authorities.
Natixis is the investment bank of the French savings banks and cooperative banks. It is one of the 20 largest wealth managers in the world. At short notice, the bank did not respond to a request.
Cum-Ex refers to a method of stock trading in which those involved illegally evade capital gains tax. Since the law was changed in 2012, classic cum-ex transactions are no longer possible.
After that, some banks tried other variants to be illegally reimbursed with capital gains tax. Because the investigations against Natixis go back to 2015, there is apparently a suspicion that the French financial institution was also involved in such models.
This is also supported by the fact that Natixis was already the focus of the investigative authorities at the end of March 2023. As part of a Franco-German cooperation, officials searched five financial institutions in Paris. In addition to Natixis, the industry heavyweights BNP Paribas, its investment subsidiary Exane, Société Générale and HSBC were affected.
France’s focus on cum-cum deals
The French national financial prosecutor spoke of possible “serious money laundering” and “serious tax fraud” during the investigation. The searches had been prepared for months.
16 investigating judges and 150 investigators from the French tax authorities were on duty, as well as six public prosecutors from Cologne. The authorities did not name the suspects.
The raids in Paris focused on the suspicion of tax evasion using cum-cum transactions. The term refers to the trading of shares with (Latin cum) dividend entitlement. French tax law stipulates that only French people can claim a refund from the tax office of the capital gains tax they have to pay on dividends. Foreign shareholders cannot do this, or only partially. The same principles apply in Germany.
Cum-cum transactions were intended to circumvent this limitation of counting. Foreign shareholders lent their securities to a domestic bank just before the dividend payment. This was then able to have the full capital gains tax refunded. Shortly after the dividend record date, the bank returned the shares to their original owner. She received a commission for aiding and abetting tax evasion.
In the meantime, tax officials have asked numerous banks to repay illegally received tax refunds from cum-cum transactions. Most recently, it hit the Hamburg private bank MM Warburg. The bill from the tax office is about 100 million euros. Warburg defends himself against the demand.
Investigations are gaining momentum
According to information from the Handelsblatt, Natixis in Germany has filed a lawsuit for damages from a former business partner because of this transaction. The Erzgebirgssparkasse has sued Natixis for almost one million euros in damages. No further details are known about the status of the proceedings.
German prosecutors have already targeted several institutes for potential cum-cum deals. Investigations in the environment of SEB and Dekabank, the securities house of the savings banks, are known. In a cum-cum case – the Deutsche Pfandbriefbank is affected here – the Wiesbaden public prosecutor’s office has already filed charges: the Wiesbaden district court is examining their approval. Five people are accused – former bodies and employees of the former German unit of Depfa.
Most recently, the “Wirtschaftswoche” reported that the Mannheim public prosecutor’s office is also investigating cum-cum. Three people are suspects.
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