Private bank Investec, which has operations in South Africa and the UK, continues to co-operate with German authorities over a long-standing matter in which some of its staff were allegedly involved in historical involvement in German dividend tax arbitrage transactions.
The transactions, also known as cum-ex transactions, are a way of exploiting a loophole on dividend payments that enabled several parties to claim the same tax refund. It has also been called dividend stripping, UK law firm Rahman Ravelli explains on its website, which also contains an example trade.
Rahman Ravelli says the dividend stripping, which took place before 2012, could have cost it 10 billion (R196bn) in lost revenue.
But there may be more than ten other European countries affected; with estimates saying around 55bn may have been lost to those nations treasuries, it says.
Speaking during a pre-close conference call on Friday morning, Investec CEO Fani Titi said the bank took a provision through its books about four years ago, which it deemed sufficient to cover any potential liability.
