Alphavalue/DIVACONS | The headquarters of five banks were the subject of judicial searches in and around Paris yesterday as part of an investigation into aggravated tax fraud, the National Financial Prosecutor’s Office (PNJ) said. According to the daily Le Monde, which broke the news, the banks under investigation are Société Générale (buy, P. O. 35.9 eur/acc), BNP Paribas (buy, P. O. 71.3 eur/acc), and its subsidiary Exane, Natixis and HSBC (add, P. O. 701 pounds).
As confirmed by the financial judicial authority, the searches at the headquarters of “five banking entities” in the financial district of the French capital are part of preliminary investigations opened in December 2021 in connection with a tax evasion trap using the so-called “CumCum” (coupon laundering) method.
This type of tax fraud consists of a foreign shareholder of French-listed companies lending their securities to a French bank when the dividend collection date is approaching, thus avoiding the payment of withholding tax levied by the French tax authorities on dividends collected by foreign residents. According to Bloomberg, these banks could face more than €1 billion in fines.