German Chancellor Olaf Scholz rejected accusations of impropriety in his handling of multibillion-euro tax fraud. This scandal led to a situation in which the German state treasury suffered billions in losses. The chancellor emphasizes, however, that he did not know anything about the case.
In the scheme of “cum-ex” or dividend stripping, banks and investors would swiftly trade shares of companies around their dividend payout day, blurring stock ownership and allowing multiple parties to falsely reclaim tax rebates on dividends.
The loophole, now closed, took on a political dimension due to authorities’ sluggishness under the mayorship of Scholz at demanding repayment of millions of euros gained under the scheme by local bank Warburg.
Warburg, which plays a big role in Germany’s second-largest city, eventually paid its tax bill of around 50 million euros, after the federal finance ministry intervened.