The Macquarie Group Ltd (ASX: MQG) share price will be one to watch on Friday after the investment bank released an update on an industry-wide investigation relating to dividend trading in Germany.
What did Macquarie announce?
After the market close on Thursday, Macquarie advised that it continues to cooperate with German authorities in relation to an historical German lending transaction in 2011.
As part of the investigation, German authorities have recently named 60 current and former Macquarie staff as suspects in relation to historical short selling-related activities.
Most of these suspects are no longer at Macquarie. However, one notable name under investigation that is still with Macquarie is the company’s chief executive officer, Shemara Wikramanayake.
Shemara Wikramanayake, who was previously the head of asset management, replaced former chief executive Nicholas Moore in the top job in December 2018.
What is the investigation?
The transactions under investigation involve the lending and selling of shares around the day a company paid a dividend.
This allegedly exploited a design flaw in Germany’s tax code that allowed investors to trick authorities into refunding dividend tax that was never actually paid. The German government estimates that this exploit has cost taxpayers upwards of €5.5 billion in total.
Macquarie’s 60 staff members are amongst 400 suspects in total that are being investigated by authorities in Germany. This includes current and former staff from German banking giant Deutsche Bank.
This isn’t the first time the Macquarie has been under investigation in the country. Around two years ago the investment bank settled two older cases and paid an undisclosed sum to German authorities.
The investment bank advised: “The total amount at issue is not considered to be material and MGL has provided for the matter. We note that no current staff members have been interviewed to date.”
The post Macquarie share price on watch amid German tax scam probe appeared first on Motley Fool Australia.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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