EY hit with €95m claim over tax scandal advice
Big Four accountancy firm EY has been targeted with a €95m (£80.5m) lawsuit for advice it gave to a collapsed bank that allegedly defrauded the German state.
The administrator to Maple Bank filed the lawsuit against EY in Stuttgart.
The claim relates to the so-called cum-ex scandal which led to the closure of Maple Bank by German authorities in 2016.
A spokesperson for EY Germany said: “We reject the allegations of the liquidator. We are unable to comment on any ongoing proceedings.”
Dividend stripping, or cum-ex trading, involved using a now closed legal loophole to claim tax credits for both buyers and sellers of shares by buying shares just before their dividends expired and then selling them on straight away.
The trades cost authorities in countries across Europe billions of euros in tax and have led to a wave of claims against the bankers, lawyers and accountants who benefited from the alleged fraudulent schemes.
In August, it emerged that Magic Circle law firm Freshfields Bruckhaus Deringer had settled a €95m claim brought against it by Maple Bank’s administrators for €50m.
Last month the former head of tax at Freshfields, Ulf Johannemann, was charged by German prosecutors alongside six former Maple Bank employers.
The Frankfurt Prosecutor’s office alleged the group caused tax losses for the German state of more than €380m through cum-ex deals.
The lawsuit against EY was first reported by German newspaper Handelsblatt.
CMS Hasche Sigle insolvency partner Michael Frege is acting as Maple Bank’s administrator.
The firm said it was unable to give a detailed comment as insolvency proceedings in Germany are private.
“We are only allowed to confirm, there is a claim filed in the name of the insolvency debtor Maple GmbH against the accounting firm E&Y at the district court of Stuttgart,” the firm said.