Olaf Scholz faces fresh scrutiny over alleged role in waiving of bank’s tax bill

theguardian.com:

Olaf Scholz faces fresh scrutiny over allegations that he was responsible for waiving a multimillion-euro tax bill for a private bank involved in a tax fraud scheme, as the German chancellor struggles to shake off links to alleged local government sleaze from his stint as mayor of Hamburg.

On Tuesday it emerged that prosecutors investigating illegal so-called “cum-ex” trades have spent the last few months raking over Scholz’s emails from when he governed the prosperous northern city-state between 2011 and 2018.

On 19 August the Social Democratic party (SDP) politician will be dragged back in front of a Hamburg parliamentary committee to explain whether he held a protecting hand over a prestigious bank with financial pulling power in his home town, as well as his relationship to a party ally who had proactively lobbied for and later allegedly called in financial favours for his party from the same institution.

At the chancellor’s annual summer press conference on Thursday, Scholz again denied having politically influenced the process of waiving the tax bill.

At the heart of the allegations lies MM Warburg & Co, Germany’s oldest and largest private bank, headquartered a short walk from Hamburg’s town hall.

Between at least 2007 and 2011, Warburg practised cum-ex deals on a grand scale, trading shares at high speed on or just before the dividend record date – the day the company checks its records to identify shareholders – and then claiming two or more refunds for capital gains tax that had in fact been paid to the state only once.

Prosecutors allege the bank thus swindled the German state out of an estimated €300m.

The name refers to rapidly traded shares with (“cum”) and without (“ex”) dividend rights. Last year the German