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Germany's Bafin declares Maple Bank an indemnification case

Published 2016-02-12, 05:32 a/m
© Reuters. Germany's Bafin declares Maple Bank an indemnification case
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FRANKFURT, Feb 12 (Reuters) - German financial watchdog
Bafin declared Maple Bank GmbH to be an indemnification case,
meaning that deposits of up to 60 million euros ($68 million)
per client will be covered by Germany's banking association's
guarantee fund.
Insolvency proceedings have been started for the German unit
of Canada's Maple Financial, whose operations Bafin closed on
Sunday on impending financial over-indebtedness related to
tax-evasion investigations.
In September, German prosecutors searched offices and
residences linked to Maple Bank in a probe of serious tax
evasion and money-laundering connected to so-called
dividend-stripping trades.
The trades involve buying a stock just before losing rights
to a dividend, then selling it, taking advantage of a now-closed
legal loophole that allowed both buyer and seller to reclaim
capital gains tax.
Bafin said on Friday it had established that Maple Bank was
no longer in a position to pay back all its customers' deposits,
and that the guarantee fund would soon contact the bank's
creditors.
Deposits of up to 100,000 euros are safeguarded by Germany's
deposits protection scheme. Bafin said in exceptional
circumstances this could be raised to 500,000 euros.
German daily Sueddeutsche Zeitung has reported that
Frankfurt prosecutors allege that Maple Bank and its business
partners have deprived German taxpayers of about 450 million
euros ($508 million).
The bank, which shot to fame in Germany in 2008 when it
helped Porsche PSHG_p.DE in its failed takeover attempt of
Volkswagen VOWG_p.DE , has an equity capital of just 300
million euros.
Bafin has said the lender, with 5 billion euros in assets,
poses no threat to Germany's financial stability.
($1 = 0.8859 euros)

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