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Tax evasion: Defendant in the Cum Ex scandal charged Deutsche Bank

2019-09-18T15:41:16.477Z

In the process of the largest tax scandal in German history, one of the defendants testified. The cum-ex-shops would have had an "industrial character".


Before the regional court Bonn one of the two indicted former banker in the Cum-Ex-process testified. As for the system of business, he said, "Cum-Ex includes a wide network of companies, individuals and corporations." It was about "achieving maximum profit optimization". One tool was the "tax optimization".

The extent of tax avoidance activities has assumed an "industrial character", he said. And he mentioned names of institutions involved: Among major banks, which would have participated in the tax transactions, is the Deutsche Bank. The company Clearstream, a subsidiary of Deutsche Börse, also played an important role in the transaction.

When asked if he would behave differently in retrospect, the former banker said: "With my current level of understanding, the answer is clear: I would not have become part of the cum-ex-industry." To explain the complex transactions, the defendant used in court charts and Excel spreadsheets that were projected on the wall of the courtroom.

447 million euros through tax tricks

A second defendant, also a British investment banker, has to answer to the court. He would also testify. Among other things, they worked for Hypovereinsbank. The two men are accused of having brought the German state between 2006 and 2011 with cum-ex-shops by 447 million euros.

The prosecution sees participation in 34 cases of particularly serious tax evasion. The accused is threatened with imprisonment for up to ten years. If they contribute to the investigation of complex transactions and testify, it could influence their sentence in their favor.

The cum-Ex transactions are considered the largest tax scandal in the history of the Federal Republic. Tax inspectors estimate the damage caused by such transactions to more than ten billion euros. In the case of cum-ex transactions, investors can use the banks to repay the once paid withholding tax on stock dividends on multiple occasions. To do so, they postpone shares with and without dividend entitlement - ie cum and ex , as it is called in Latin, around the dividend payment deadline. Until 2012, this practice was legal.

At the beginning of September, the first criminal case against two British securities dealers started in front of the Bonn district court.

Briefly explained - How the Cum Ex tax scandal has expired It is probably the largest tax scandal in German history. How banks and lawyers stole billions, we show in this video. © Photo: Kerstin Welther

Source: zeit

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