A special unit of German prosecutors that targets taxevasion is reviewing various transactions that used the dividend-strippingtechnique to avoid paying taxes, Bloomberg News reported, citing AlexanderBadle, a spokesman for Frankfurt's general prosecutor's office.

The development comes after emerged that was using thequestionable practice, the newswire noted May 9. Badle refused to name anysuspects or the bank that handled the transactions.

Under the so-called cum-cum practice, a bank, on a temporarybasis, takes over shares that are owned by foreign investors right before adividend is paid on them to claim tax breaks, which are given only toGermany-based shareholders. German Finance Minister Wolfgang Schäuble said thedisproportionate use of the practice is not "legitimate" and isreportedly looking to change laws to prohibit this practice.

Although Badle had said in the week of May 2 that theprosecutor's office was not probing the transactions, he said "this haschanged" now. Prosecutors have opened five probes into such transactions,the newswire reported. The first probe dates to 2012 and looks into"cum-ex" transactions that took advantage of loopholes that thenexisted in the country's tax law which allowed short sellers and actualshareholders to claim tax benefits on a dividend, the newswire noted.