Warburg-Bank paid 30 million euros to the tax authorities

The German state has lost billions from co-ex deals. Now first the banks will have to repay some part of the fund.

Warburg Bank and American Bank of New York Mellon (BNY Mellon) each co-pay approximately 30 million euros to the Federal Central Tax Office in the former scandal. The business newspaper “Handelsblatt” reported on Sunday. The financial houses want to use this amount to compensate the loss to the state by the co-ex fund for wealthy investors. With co-ex transactions, banks and customers can have a refund of taxes they did not pay over a period of twenty years.

The fund, called the “BC German Equity Special Fund”, was managed as an investment company by Warburg Invest 2009, a subsidiary of Warburg. The fund was founded by investment bankers Paul Mora and Martin S. The latter was convicted in a criminal trial at the Bonn Court, while Mora has been charged and is on the run.

In 2009, the Federal Central Tax Office wrongly reimbursed approximately 60 million euros. In this way investors earned up to 30 percent of their fund shares in a very short time. Deutsche Bank is also among the beneficiaries: as a lender, it provided 742.9 million euros in loan capital for co-ex transactions through custodian bank BHF Asset Servicing.

Warburg Bank and BNY Mellon expect them to actually pay only half of the 30 million. The other half may come from dealers, lawyers, and those involved, provided they are punished to make a reasonable payment.