News Analysis: MIRA feels the heat from “cum ex” tax inquiry

05 February 2019 - 12:00 am UTC

When Macquarie Infrastructure and Real Assets (MIRA) hired ex-DWS banker Philip Mikkelsen to spearhead a push into Scandinavian infrastructure last summer, the infrastructure investor had recently led the acquisition of Denmark’s biggest telecoms company and was gearing up for further M&A activity in the region. 

Six months later, MIRA faces the possibility of being effectively frozen out of Denmark, following allegations that its parent Macquarie Bank did business with a trader the Danish government accuses of defrauding it of around EUR 1.3bn. 

The allegations came to light after a co-ordinated investigation into the “cum ex” tax scandal by journalists from big media organisations across Europe including Danish broadcaster DR and German newspaper Die Zeit. 

The scandal arises from a system in several European countries under which shareholders can claim back taxes on dividends they have been paid if they can prove they owned shares around the time of the dividend payment. Traders exploited this system to enact a scheme under which shareholders sold shares to at least one other investor – who would also be able to claim back the tax paid on the dividend. The loophole meant that one or more investors could claim back tax paid on dividends, or claim losses for tax purposes, when only one of the investors had actually paid the tax.

Macquarie Group on 28 September issued a statement confirming that it in 2011 lent money to unnamed investment funds that were involved in trading shares in this way. It noted that one of these transactions is now being investigated by the German authorities and that up to 30 Macquarie staff are expected to be interviewed by the Cologne Prosecutor’s Office in relation to the transaction. These interviews have not taken place yet, it is understood. The investment funds’ credit claims were refused so there was no loss for German revenue in relation to the matter, Macquarie said.

Macquarie, which declined to comment for this article, is one of a number of banks that is being investigated in relation to such trades in Germany, with reports saying more than 100 banks are involved. 

But in Denmark, Macquarie has been singled out by the media over an investigation into similar practices in the Scandinavian country. The Australian bank is under fire over its association with Sanjay Shah, a British trader who has been accused by Danish authorities of enacting a scheme involving swapping shares so that multiple owners could claim back dividend taxes despite only one owner actually having incurred the tax.

Macquarie has confirmed that it has done business with Shah, lending money to his hedge fund Solo Capital, but said that this was for trades centred on Luxembourg shares in 2012 that had the approval of the Grand Duchy’s tax authorities and only involved two transactions. It says it did not participate in Shah’s scheme in Denmark and has not lent money to funds involved in trading Danish shares.


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