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NS Macquarie Group Ltd (ASX: MQG) Friday’s stock price ended in the red.
At Closing Bell, stocks, one of Australia’s largest financial institutions, fell 3.22% to $ 195.28.Weaknesses continue Report ABC News shared that Macquarie is at the center of the $ 80 billion scandal investigation.
But Macquarie isn’t the only one in the hot water, it’s one of the 100 banks and financial institutions under the microscope. This scandal is due to a German tax loophole that is believed to have been abused between 2001 and 2012.
What is a German tax scandal?
Macquarie’s stock price fell on Friday as the tax scandal deepened. Plans called “the biggest bank scandal in history” essentially included tax refund double dipping. To do this, financial institutions engaged in the rapid trading of European Union stock.
In short, the tax authorities seemed to have two owners of the shares at the same time, with or without dividend rights. Even foreign investors could claim a tax refund on shares they didn’t actually own.
Macquarie’s involvement includes lending funds to increase the volume of such transactions. In October 2010, Macquarie’s board of directors was convened to discuss a proposal to offer hundreds of millions of dollars to foreign funds. In return, investment banks receive up to $ 30 million per loan agreement.
Despite the permission given by the company’s legal team, there was a sense of confusion about the legality of the transaction. For example, here are some notes to the board for deliberation:
If the German authorities take steps against the funds, there is a risk that reputation risk remains.It is difficult to quantify the reputation risk associated with this transaction and we propose [the Executive Committee] Weigh this against your expected earnings.
A blow to Macquarie’s stock price
Today’s revelation includes new documents found in a joint investigation between ABC and the German news agency Correctiv.
These documents show that Macquarie is engaged in the German tax system and misses the risk of reputational damage and legal issues.
For example, an email detailing the risks of a transaction classified as tax evasion was received by current CEO Shamara Wikramanayake. After transferring to a colleague, the concern was dismissed. Immediately after the Board approves a proposal to fund such a transaction.
Since then, Macquarie is believed to have repaid approximately $ 150 million. The loophole was removed by the German government in 2012.
A Macquarie spokeswoman said statement ABC continued to say that banks are “constructively cooperating with German authorities.” However, “I couldn’t comment anymore.”
Shareholders may be concerned about what the total cost would be if the investigation were in progress.Ironically, Macquarie’s share price fell another ASX bank earlier this week. One of the big 4..
Macquarie (ASX: MQG) shares fall in email leaks surrounding Germany’s tax scandal
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