Banking giant HSBC will appear in a Paris court this week to finalise a fine reported to be as much as 300 million euros over alleged dividend tax fraud, according to reports from French news agency AFP.
The case is part of investigations sparked by a massive fraud carried out for years in several European countries, revealed by a consortium of European news outlets in 2018.
Several banks were raided after the allegations emerged, and some have already agreed to multimillion-euro fines to avoid further prosecution.
Prosecutors raid French banks in multi-billion-euro tax fraud investigation
"A hearing to validate the deal concerning HSBC in the fiscal domain will take place Thursday at 10.00 am," the legal source said, without further details.
In December, Bloomberg News reported the fine would be 300 million euros to close the investigation, which the Paris financial prosecutor's office has not confirmed.
'CumCum' tax fraud
Contacted by French news agency AFP, HSBC declined to comment but referred to a note from its third-quarter earnings statement in October, which cited a 300 million euro provision for an inquiry "relating to dividend withholdings of certain legacy trading activities".
The financial prosecutor's office launched in December 2021 inquiries into six large banks, which the judicial source confirmed as HSBC, a Credit Agricole unit Cacib, BNP Paribas and its Exane unit, Societe Generale and Natixis.
The fraud is known as "CumCum" and involves an investor selling shares to another party just before dividend payment day, to avoid paying taxes, and then immediately repurchasing the shares, with both parties sharing the illicit proceeds.
It was exposed alongside a similar "Cum-ex" dividend tax fraud published by the media consortium in 2018.
In September, Credit Agricole's Cacib was the first to accept a deal with French prosecutors, agreeing to pay 88 million euros.
(with AFP)
