PARIS, Jan 8 (Reuters) - London-based bank HSBC has agreed to pay 267.5 million euros ($312.33 million) to the French treasury to settle up a case over fraud on dividend tax payments, French financial
HSBC Agrees to $312 Million Settlement in French Tax Probe
PARIS, Jan 8 (Reuters) - International bank HSBC has agreed to pay 267.5 million euros ($312.33 million) to the French treasury to settle an investigation into alleged dividend tax payment fraud, the French financial prosecutor's office said on Thursday.
The prosecutor began investigating the bank as part of a broad dividend tax fraud probe that has implicated several banks in the country. Similar investigations have been conducted in Germany and other European countries.
The HSBC settlement, which was approved by a Paris court on Thursday, puts an end to a probe which covered practices between 2014 and 2019.
The investigation into HSBC focused on trading schemes involving intra-group dividend arbitrage transactions, which the prosecutor alleged could constitute tax fraud. HSBC's settlement is not an admission of guilt.
HSBC said in a statement it was "pleased to have resolved this matter which relates to certain historical trading which ended in 2019."
"The settlement with the (prosecution) recognises the Bank’s co-operation with the investigation, as well as the corrective measures it took to address the historic issues," HSBC said.
The bank did not say whether it has made any provisions for the settlement or how it might affect its results.
The probe into HSBC and other banks began as an investigation into dividend stripping trades widely known as "cum-cum" and "cum-ex". These are schemes whereby banks and investors swiftly trade shares of companies around their dividend payout day.
The trades are designed to blur stock ownership and allow multiple parties to illegally claim tax rebates on dividends, and have led to investigations and prosecutions across Europe.
The prosecutor's statement on the HSBC settlement made no mention of cum-cum or cum-ex trades.
A German court in 2022 sentenced tax lawyer Hanno Berger to eight years in jail after he was alleged to have masterminded one of the country's biggest post-war frauds through a dividend-stripping scheme that some estimates said cost German taxpayers around 10 billion euros.
($1 = 0.8565 euros)
(Reporting by Inti Landauro;Editing by Sudip Kar-Gupta, Tommy Reggiori Wilkes and Tomasz Janowski)
