German prosecutors search BlackRock in sham trades inquiry
* Prosecutors probe scheme to generate double tax rebates
* Investigators search BlackRock's Munich office
* BlackRock's Merz, bidding to succeed Merkel, not a suspect
(Adds detail, background)
By Matthias Inverardi and John O'Donnell
FRANKFURT, Nov 7 (Reuters) - German state prosecutors
confirmed they searched the Munich offices of investor BlackRock
as part of a probe into an illicit tax trading scheme but
exonerated the company's local chairman, who is vying to succeed
Chancellor Angela Merkel.
The prosecutors are investigating a fraud known as cum-ex
that typically involved trading company shares rapidly around a
syndicate of banks, investors and hedge funds to create the
impression of numerous owners, each entitled to a tax rebate.
On Tuesday, they searched the Munich offices of BlackRock,
prompting the globe's biggest investor to say that it was fully
cooperating with the probe of cum-ex transactions between
The search has prompted wide national interest in Germany
because Friedrich Merz, a potential successor to Merkel, has
held the post of BlackRock's chairman in Germany since 2016.
Merz, who was not there at the time of the trades that are
being investigated, said he had ordered the fund's management
board to investigate all incidents involving such cum-ex deals.
"Everything will be investigated and we will actively
participate in that," he said at a political event in the
northwestern German city of Duesseldorf on Tuesday.
Confirming the search, Cologne prosecutors said on Wednesday
that Merz was not suspected of wrongdoing.
Merz has taken an early lead in the race to succeed Merkel
as leader of Germany's Christian Democrats and secure the chance
of running for chancellor, possibly as soon as next year.
Gerhard Schick, a Greens party member of Germany's
parliament, said the case raised the question as to whether Merz
had responded promptly enough.
(Reporting By Matthias Inverardi; Writing by John O'Donnell;
Editing by Maria Sheahan and Paul Carrel)
First Published: 2018-11-07 10:02:50
Updated 2018-11-07 13:50:41
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