Million-dollar debt controversy surrounds Warburg Bank
The Warburg Bank, embroiled in the Cum-Ex scandal, has recently experienced a legal setback. The Munich Federal Finance Court has dismissed the bank's complaint against a decision by the Hamburg Financial Court, which ruled against Warburg Bank's attempt to reclaim €155 million from the tax administration.
The Hamburg Financial Court's ruling, made in Case No. 6 K 228/20, determined that the tax refund claims totaling €155 million against the Warburg Bank were valid. However, this decision was finalized in November 2023 and no revision was granted, meaning the bank must forgo efforts to recover the money.
The Cum-Ex transactions, a complex financial maneuver involving the trading of shares with and without dividend claims between multiple parties, have been under scrutiny for years. The Warburg Bank paid the €155 million in 2020 under protest, following a demand by the tax authority for unpaid capital gains taxes from these fraudulent transactions.
Since paying the sum, the Warburg Bank has been attempting to recover the money through legal means. The investigation into the case was sparked by three meetings between Warburg shareholders Christian Olearius and Max Warburg and the then-mayor and later chancellor Olaf Scholz in 2016 and 2017.
Scholz, who claims not to remember the meetings with the bankers, has consistently rejected allegations of influence. No evidence of influence was found by the time the PUA concluded earlier this year, according to reports.
The Warburg Bank's tax affairs have been a subject of political debate, with a parliamentary inquiry committee of the Hamburg Parliament investigating possible influence by leading Hamburg SPD politicians on the tax case. The Federal Finance Court in Munich also rejected an appeal by the Warburg Group, adding to the bank's legal woes.
This development marks a significant loss for the Warburg Bank, as it grapples with the consequences of the Cum-Ex scandal. The scandal has resulted in a multi-billion-euro loss for the German state, with tax authorities refunding capital gains taxes that had not been paid due to these transactions.
[1] Source: Hamburg Finance Court Decision VIII B 17/24, Munich Federal Finance Court Decision, Warburg Group's appeal.
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