Australia's Macquarie Bank Ltd. has been caught up in a German lawsuit involving controversial tax arrangements that cost investors €190 million, Bloomberg News reported Oct. 15.
The Australian lender allegedly financed a high-risk fund linked to the cum-ex scandal. Eckart Seith, a lawyer for the investors, told a court in Munich that Macquarie financed the deals in 2011 even after it knew that the German Finance Ministry was trying to clamp down on the practice.
Under the practice, short sales of German stock around dividend day are used in a bid to obtain double tax refunds, the report noted.
Seith said that 22 employees who worked in Macquarie Bank are suspects in one of the criminal probes, including Macquarie Group's former CEO Nicholas Moore and current CEO Shemara Wikramanayake. He said that the bank acted as a prime broker in tax-driven trades made by Luxembourg fund Sheridan and claims that his clients were unaware about the real nature of the deals. Seith wants Macquarie to cover his clients' losses of some €30 million.
A lawyer for Macquarie asked the court to dismiss the case, saying that the bank provided capital but did not sell the fund's shares to investors. A Macquarie spokeswoman declined to comment, the report said.