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The BlackRock office in Munich was raided Tuesday. A person familiar with the investigation stated that BlackRock was not charged with tax evasion.
Photo:
Rudnik, Christian / Zuma Press
FRANKFURT – German prosecutors raided Munich offices
Black rock
Inc.
BLK 0.59%
as the world's largest asset manager becomes the last company to be dragged into a lengthy criminal investigation of tax evasion.
The audit focuses on so-called cum / ex transactions, which are transactions executed during the few days before and following the dates of payment of expected dividends. The survey on historical trades has already resulted in other companies and banks.
A spokesman for BlackRock said the company "cooperated fully with an ongoing investigation regarding cum / ex transactions between 2007 and 2011". A person familiar with the investigation said that BlackRock, whose offices were raided Tuesday, has not been charged with tax evasion.
Cumulative / ex-trades typically involve banks, brokerage firms, hedge funds and wealthy individuals entering into purchase, borrowing, and selling agreements in a short period of time around the payment of the interest. 'a dividend. The carefully coordinated timing of transactions has allowed many parties to claim a refund of taxes paid on dividends.
The German authorities claim that tax credits have been claimed artificially through these types of transactions in a manner that could constitute fraud. The German government has taken steps to prevent such transactions in the country and has filled the tax loophole in 2012. German Finance Minister Olaf Scholz said last month that the country was seeking to recover from the situation. 39; money. German media reported that fraud accounted for 5.3 billion euros ($ 6.1 billion).
Prosecutors from Cologne, Munich and Frankfurt are working on the case in Germany. Probes have also been launched by other countries, including Denmark and Austria.
Legislators have called for a Europe-wide investigation on this issue, which has so far been handled only by local authorities.
"We need a European investigation into the scandal of financial supervisors," said Sven Giegold, representative of the German Green Party in the European Parliament. "Politicians must eliminate all known tax loopholes and severely punish illegal activities," he added.
The raid on BlackRock's Munich office comes at a critical juncture for the head of the unit's supervisory board, Friedrich Merz, a candidate for the succession of German Chancellor Angela Merkel as head of the party of the Christian Democratic Union . Mr. Merz arrived at BlackRock in 2016, following the period under investigation.
Write to Patricia Kowsmann at [email protected]
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