HSBC, SocGen and BNP Paribas raided in France as part of ‘cum cum’ tax probe
French authorities today raided the Paris offices of five major banks – including HSBC, BNP Paribas, and Société Générale – in relation to an ongoing fraud and money laundering investigation.
In a statement, France’s national fraud prosecutor said the raids relate to a preliminary investigation into so-called ‘cum cum’ schemes, which was opened in December 2021.
France’s Parquet National Financier (PNF) fraud office launched its investigations after receiving complaints from the country’s tax authorities, the agency said.
The so-called ‘cum cum’ scandal is centred around allegations of tax evasion in relation to money owed on dividends, with domestic banks taking over shares in a company from a foreign holder just before a dividend is paid, with the domestic operation benefiting from a tax break.
It is separate to the German ‘cum ex’ scandal, which relates to the tax treatment of dividends when short sellers are involved.
The fraud office said its investigations relate to claims foreign shareholders in French listed companies temporarily transferred shares they own to accounts in France to avoid paying tax on dividends.
As part of their investigation, the fraud investigator today raided the offices of HSBC, BNP Paribas, Société Générale, investment bank Natixis, and BNP Paribas owned brokerage Exane in Paris and La Défense.
HSBC, BNP Paribas, Société Générale, Exane and Natixis were contacted by CityAM for comment.
German authorities started investigating the separate cum ex scandal back in 2017 following reports from investigative journalists.
The German lawyer who masterminded the cum ex scheme was handed an eight year jail sentence in December.