Cum-ex scandal: Investigators search Sparda-Bank Berlin
Berlin This year’s annual report of Sparda-Bank Berlin is entitled with the word “Hope”. Since this week, the leadership needs more of it again: According to information from the Handelsblatt, investigators under the auspices of the Cologne Public Prosecutor’s Office have been searching their headquarters since Tuesday.
The public prosecutor’s office and the bank confirmed the raid. “The preliminary investigation – part of the Cum-Ex complex – is directed against several people on suspicion of tax evasion. In addition to representatives of the public prosecutor’s office in Cologne, investigators from the tax investigations of North Rhine-Westphalia and the Federal Central Tax Office are involved in the search, ”said a spokesman for the authorities when asked.
Because of the tax secrecy, nothing can be said about further details. Sparda-Bank Berlin is involved in the same affair that affects more than 100 banks in Germany and around the world: cum-ex-share trading at the expense of the tax authorities.
The term Cum-Ex does not appear in the “Hope” annual report of Sparda-Bank Berlin. Nevertheless, several former and current employees are accused. The bank confirmed to the Handelsblatt that the bank had been searched in connection with an investigation. “We are cooperating with the investigative authorities,” said a spokesman for the bank. The bank did not want to comment on the ongoing proceedings.
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For many years, the banks involved in cum-ex deals aimed to have capital gains taxes reimbursed that had not been paid. It is one of the largest tax sandals in economic history. In order for the deals around the distribution date of the shares with (cum) and without (ex) dividend to work, many players had to participate.
NRW Justice: Sparda with an important role in stock group business
Investors provided capital, banks leveraged the investments sometimes by a factor of 20. There were short sellers and buyers, custodian banks, brokers and stock exchanges. Consultants developed precise plans for how the trade was to be carried out. NRW Minister of Justice Peter Biesenbach describes cum-ex transactions as “industrially driven tax evasion”.
The Cologne public prosecutor’s office, which has been staffed by Biesenbach, apparently ascribes an important role to Sparda-Bank Berlin in the stock group business. Much became known about the work of the bank in the first cum-ex criminal proceedings against two stock traders from London and the Hamburg private bank MM Warburg – who had previously worked for Hypovereinsbank (HVB).
The two stock exchange traders were sentenced to suspended sentences for their contributions to clarification, the Warburg Bank to a payment of 176 million euros. A few months ago the Federal Court of Justice confirmed the judgment.
Nicholas D., one of the two defendants, had described in detail at the main hearing how business with Sparda-Bank was going. D. explained that the cum-ex deals were planned well in advance because an extremely large number of shares were required. The various parties involved in trading had to ensure that supply and demand matched and that the short sellers could stock up after the dividend cut-off date.
HVB was one of the banks that supplied short sellers with shares after the distribution date. Experts refer to them as Ex-Ex units. They held the shares during the distribution and only received the net dividend as taxes were automatically deducted. The Ex-Ex unit donors received the first, legal tax certificate. At the end of the district deal, these banks got their shares back.
HVB could not fulfill this role on its own. Internal limits had to be observed – apparently the bank wanted to keep the risk within limits. There were also reporting thresholds to be observed. Anyone who held more than three percent of a particular company had to inform the supervisory authority.
This is where Sparda-Bank Berlin came into play. Due to the restrictions, HVB transferred some of the papers to the cooperative institute. Defendant D. described the agreement with Sparda-Bank as a “turbo charger” for the business. Internally at HVB, the deals even had their own name: They were called Sparda-Trades.
Sparda Berlin was not the only bank that took shares on its own book and supported the ex-ex-unit donor HVB. Other Sparda banks and savings banks also took part in the deal. The defendant D. mentioned the Sparda Bank in Nuremberg. They received tax certificates for the capital gains tax calculated on the dividends. They submitted this to the tax office in return for a corresponding credit.
The Sparda-Bank Berlin is therefore already having problems with the tax audit. The authority demanded back what they considered to be wrongly paid taxes. It should go to a higher double-digit million amount. However, the Berliners do not want to be left alone with the damage. For their part, they have sued their former business partners.
More: Accusation of serious tax evasion: shock for multimillionaires and billionaires