As a mathematician and specialist in risk analysis, Detlef M. has to rely on facts and not on his gut instinct.

In the case of share group transactions around the dividend cut-off date (“cum-ex”), the former managing director of Warburg Invest, the investment subsidiary of the private bank M. M. Warburg, did not want to have “alarm lights” raised in 2009.

He was not “sensitized” to the “systematic abuse” of the tax-driven trading strategy presented to him by tax attorney Hanno Berger and his long-time partner S. large criminal chamber at the Bonn Regional Court.

Marcus Jung

Editor in business.

  • Follow I follow

The 63-year-old fund manager has to answer for himself there because as managing director of Warburg Invest in 2009 and 2010 he helped set up two funds through which cum-ex transactions were carried out.

The Cologne public prosecutor's office assumes a tax loss of 157 million euros (Az .: 62 KLs 3/20).

Trusted in expert opinion

In court, M. tried to justify himself with an expert opinion from Berger's law firm at the time, Dewey & LeBoeuf. The assessment of a US law firm renowned for tax and supervisory law was not a “fig leaf” for him, i.e. not a courtesy report. It wasn't until the draft of a circular from the Federal Ministry of Finance in the spring of 2009 that he started thinking, M. explained to the presiding judge, Roland Zickler. The fund manager claims that the ministry's instruction was only understood as “general guidelines” for dividend stripping - which did not affect the business of Warburg Invest.

With their questions, Zickler and his assessor Frederik Glasner uncovered contradictions of the defendant.

They held up emails to M.

Zickler was particularly annoyed that M. released complex deals without understanding them himself.

In May 2009, he wrote to the tax authorities that he was unaware of any agreements between parties involved - three days earlier, Warburg's internal audit department had expressly informed him of the consultants' arrangements with third parties.

Judge's collar bursts

“Don't tell us anything!

Don't think we're naive! ”Burst the chairman's collar.

“For someone from the risk analysis, that's completely insane when it comes to the volume.” Investors invested 782 million euros in the “BC German Equity Special Fund”.

Billions in shares were traded.

The court interrupted the questioning around noon.

After the defendant's admission, which should be closed this week, the criminal chamber wants to hear two more prominent witnesses in January: the lawyer S., who has been incriminated by M. and appears as a key witness for the Cologne public prosecutor's office, and the British stockbroker Martin S. This had sentenced Zickler to a suspended sentence in March 2020 for participating in cum-ex deals.

If the taking of evidence does not drag on, the case of Detlef M. could soon lead to the pleadings and a judgment.