ABN Amro offices raided by police in Frankfurt over tax scandal

FRANKFURT: German law enforcement officials descended upon ABN Amro NV’s offices in Frankfurt for a second time in three months to probe the bank’s involvement in a tax scandal that’s ensnaring a rising number of companies.

Police cars were parked in a line outside the offices of the Dutch bank in Frankfurt’s financial centre and several officers were seen inside conducting searches.

Cologne prosecutors, who are responsible for the investigation, confirmed that the police visit is related to the Cum-Ex tax probe but declined to provide further details.

ABN Amro is part of a long list of companies whose offices have been raided over the scandal including BlackRock Inc, Commerzbank AG, Deutsche Bank AG, Deutsche Boerse AG, M.M. Warburg and the law firm Freshfields. The tax probe focuses on a strategy known as Cum-Ex which has implicated dozens of banks and financiers.

The lender’s Frankfurt unit was searched by about 25 German law enforcement officials in November as part of a wider raid.

In total, approximately 100 German officers searched more than a dozen private homes and offices in Germany along with a home in the Netherlands, prosecutors said at the time.

The raid is related to Cum-Ex and ABN Amro is fully cooperating with authorities, ABN Amro spokesman Jarco de Swart said of Thursday’s raid in Frankfurt.

ABN Amro extended declines in Amsterdam on Thursday, falling by as much as 5%. The stock was down 4.6% at €13.38 as of 2.40pm

Banks involved in offering the controversial Cum-Ex strategy, which ran until 2011, helped investors exploit a loophole on dividend payments, allowing multiple parties to claim the same tax refund, according to authorities.

Lawmakers say the deals eventually cost the German government €10 billion in lost revenue.

The bank said earlier this month that it may face “financial consequences” as a result of the ongoing probe and that it “frequently receives information requests from German authorities in relation to other (criminal) investigations.”

It’s not the only legal headache for ABN Amro. In September, it disclosed a criminal probe by Dutch prosecutors over alleged failures to check on clients and report suspicious transactions, prompting shares of the state-controlled bank to slump the most on the day since its 2015 initial public offering.

The investigations present a challenge for Robert Swaak, who will replace Kees van Dijkhuizen as ABN Amro CEO in April.

The former PwC Netherlands chairman was a surprise pick as he doesn’t have any banking experience. However, the executive advised organisations on know-your-customer and anti-money-laundering initiatives at PwC, and that played a role in his selection, according to the bank’s chairman, Tom de Swaan.