French prosecutors raid banks over dividend tax evasion allegations
By Barbara Kollmeyer
The French prosecutor's office on Tuesday said it raided several banks over allegations linked to a tax scandal.
The raids are focused on a so-called "cum-cum" tax evasion scandal, in which shareholders would transfer stocks abroad to bypass a dividend tax.
The prosecutor confirmed a report in Le Monde that said the banks that were raided were: HSBC Holdings (HSBA.LN), Natixis, Societe Generale , BNP Paribas and BNP's Exane.
MarketWatch contacted each firm. A SocGen spokesman declined to comment.
Shares of SocGen fell 2.6% in Paris, while BNP shares fell 1.5% and HSBC shares slipped 0.8%.
Last month saw German prosecutors raided homes of more than a dozen HSBC employees and former managers linked to a similar probe that authorities have been investigating for nearly a decade.
Under "cum-cum," investors would hold shares during times of dividend payouts, drawing either a tax refund or no tax. The stock or security would then be sold to the original owner and savings would be divided up.
German prosecutors participated in the French raid.
The development comes as the banking sector on both sides of the Atlantic has been under strain in recent weeks, due to the failure of three U.S. lenders and Swiss giant Credit Suisse (CSGN.EB).
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March 28, 2023 10:44 ET (14:44 GMT)
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