A respected banker in Hamburg for many years.
(Photo: ullstein bild – Fabricius/WELT)
Dusseldorf The Bonn Regional Court has already issued three judgments in connection with transactions by MM Warburg. With so-called cum-ex trading, the traditional Hamburg bank is said to have had taxes refunded that it had not paid at all. A new indictment was received at the Bonn Regional Court on Monday – directed against the long-standing bank boss Christian Olearius. He doesn’t even know what that’s supposed to mean.
“Mr Olearius is not guilty of anything,” says his spokesman. When asked why his former chief representative made a confession in a previous trial, the spokesman said: “I could say something about that. But I don’t want it.”
The Olearius case is once again about so-called cum-ex deals. Those involved had taxes refunded that they had not paid at all. In addition, shares were traded in a circle around the dates of the general meetings of large German corporations in order to mislead the tax authorities. The banks fooled them into believing that there were two or more owners of a share.
Now a spectacular process is imminent. Olearius is not just any banker. In Hamburg, the man is an icon – very wealthy, closely wired. When Olearius celebrated his 70th birthday in 2012, the then Mayor of Hamburg and current Federal Chancellor Olaf Scholz (SPD) was one of the keynote speakers. A committee of inquiry is meeting in the Hanseatic city about their relationship and the question of whether Scholz helped the SPD donor Olearius with his tax problems.
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Olearius always rejected the accusation that his bank had used cum-ex transactions from the tax office. Nevertheless, in 2020, as the majority shareholder, he paid back a three-digit million amount to the tax authorities together with Max Warburg.
“The majority shareholders paid the amounts from their own assets,” says a spokesman for the bank. “The Warburg Group’s tax assessment of the cum-ex transactions has proven to be incorrect. The members of the Supervisory Board and the Management Board of MMWarburg & CO disapprove of illegal tax arrangements of any kind.”
The legislature does the same. German prosecutors are required to file charges only if they expect the suspect to be convicted with a high degree of probability. Olearius is accused of particularly serious tax evasion.
The “particular seriousness” of tax evasion begins at 50,000 euros. A suspended sentence is unusual for evasion of more than one million euros. With Olearius accused of tax damage of 300 million euros, ten years in prison would be possible. Olearius is 80 years old.
>> Podcast Handelsblatt Crime: Christian Olearius and the cum-ex scandal: business captain on the wrong course
For the Minister of Justice of North Rhine-Westphalia, the indictment is an expression of a functioning legal system. “The public prosecutor’s offices never look at the position of the people involved in any procedure,” says Benjamin Limbach (Greens). “The indictment proves it.”
For Olearius, says the minister, the same applies as for the other 1551 suspects who are being pursued by the Cologne public prosecutor in the matter of Cum-Ex. For many years, more than 100 banks reached into the state coffers, including the state-owned WestLB, whose supervisory board included NRW politicians. Limbach says: “The scope of the proceedings and the number of participants has unimagined dimensions.”
These are dimensions that call an entire industry into question. In August 2020, the Cologne public prosecutor searched the headquarters of the Association of German Banks. When asked by the Handelsblatt how many officials and representatives of the association are accused in cum-ex proceedings, the association currently does not answer.
One would be Andreas Schmitz, President of the Bankers Association from 2009 to 2013. “In addition to the legal work, there is also an urgent need for an ethical discussion in the industry,” says Gerhard Schick, head of the Finanzwende citizens’ movement. “Why did so many participate in these deals? Even the banking association, which played a highly problematic role, has not yet commented on this, although it usually has a lot to say.”
Olearius continues to deny the allegations
Olearius also only says that he is innocent. Those who followed the processes at the Bonn Regional Court may have a different impression. The first began in September 2019 and ended in March 2020 with suspended sentences. The two accused stockbrokers unpacked and prepared the ground for the next trial, which began in October 2020 and ended in June 2021 with the first prison sentence in the affair. The former chief representative of MM Warburg received five and a half years in prison.
He appealed and failed before the Federal Court of Justice. In February 2022, the third Bonn Cum-Ex trial also ended with a guilty verdict. The criminal court sentenced a Warburg Invest manager to three and a half years in prison. The sentence would have been much higher if the defendant had not confessed at the last moment.
>> Read here: Cum-Ex investigations against longtime HSBC Germany boss Countess von Schmettow
Nothing suggests that Olearius will follow his example. Again and again he complained to the tax authorities that cum-ex transactions were only considered inadmissible “after the fact”. His bank has always complied with applicable law. Not more, but also not less.
The banking association saw it in a similar way – and apparently still sees it that way. “We continue to support the work of the public prosecutor’s office to the fullest extent and support legislative projects to prevent cum-ex deals positively,” says a spokeswoman when asked how the association assesses cum-ex deals.
The Federal Fiscal Court, the Federal Court of Justice and the Federal Constitutional Court have all ruled that cum-ex deals are not only illegal today, but always have been. Roland Zickler, the presiding judge at the Bonn Regional Court, who pronounced the first three judgments, said the thesis that there was a loophole in the law that allowed a double tax refund to be absurd.
Now Olearius is also going to court. He is sceptical. He told the Hamburger Abendblatt in early 2019 that he “didn’t want to hide the fact that our trust in the rule of law has suffered in the meantime”.
This assessment is also shared by others. “My trust in the rule of law has also suffered, but because of the lack of processing of the scandal,” says Schick.
More: Podcast Handelsblatt Crime – the role of Olearius in the cum-ex scandal