S.Criminal proceedings have their own dynamics, and at some point since Monday afternoon this week, the defendant Detlef M., formerly managing director of Warburg Invest, must have come to the realization that he wanted to clean things up in the cum-ex trial at the Bonn Regional Court. He had thought intensively about the persistent questions of the chairman judge Roland Zickler about the dubious share deals in 2009, explained the fund manager on Wednesday in session room 0.11 of the court. “Up until the day before yesterday I was always glossing over the processes and events back then in order to justify my actions to myself, to others and also to the judiciary”, the defendant reads in a clear, firm voice – “that was wrong.”
What follows is an admission of personal failure. The 63-year-old fund manager reports that he consistently looked the other way and suppressed feelings of disturbance in the processing of stock transactions. The reason he cites the constant pressure of expectations from his employer: the private bank MM Warburg, which was deeply involved in the tax scandal. Above all, however, their business partners had put pressure on them: the investment banker Paul Mora, whose company Ballance Capital acted as the fund initiator, as well as the lawyers S. and Hanno Berger, who started to cum under the flag of the US law firm Dewey & LeBoeuf and later in their own boutique. advised ex-trades.
Surprising confession and remorse
M., who left the Warburg Group at the end of 2021 after more than 27 years in various management positions, does not steal from his responsibility. With the establishment of the two funds and the submission of false certificates, he made the business possible, the defendant emphasizes. According to the Cologne public prosecutor’s office, the “BC German Equity Special Fund” and the “BC German Hedge Fund” launched by Warburg Invest caused a loss of 157 million euros in 2009 and 2010. “I deeply regret that I have thereby created an essential prerequisite for the execution of the transactions discussed here and the immense tax damage caused by them.”
Right from the start, he developed “an uneasiness” with the first fund project. Until then, the specialist in funds and risk analysis was primarily familiar with classic trading strategies. “Here, however, the tax refund was the only thing,” the defendant sums up in the case of the “BC German Equity Special Fund”. The draft of the circular of the Federal Ministry of Finance in March 2009 and the hectic activity of the lawyers and von Mora confirmed M.’s suspicion that the Warburg Invest product was precisely the aforementioned, illegal design of the reimbursement of unpaid capital gains tax. In court, M. speaks of various “disguises” by Ballance Capital and the long-standing Warburg lawyer S .; Hanno Berger’s once right-hand man is now the key witness for the prosecution and is due to testify as a witness in the criminal trial next week.
Care about your own career
In the spring of 2009, the defendant’s feeling of disturbance, in his own words, had become “so massive” that he even insisted that the transactions be brought forward. Then, however, the trading of shares with (cum) and without (ex) dividend entitlement would not have been possible. Mora intervened loudly at the time, M. claims in his admission. From today’s perspective, this would have been exactly the right time to cancel the project, he says. “However, I closed my eyes and continued the project.”
Even after that, the investment banker and lawyers Berger and S. exerted massive pressure to go ahead with the project at all costs. M. complied because he was worried about his professional career, there is no talk of backing his long-term employer MM Warburg. On the contrary: he was always aware that the bank did not want to endanger the business relationship and that he therefore had to continue the transactions.
On Monday, the criminal chamber had disclosed the defendant’s contradictions. “” Don’t tell us anything! Don’t think we’re naive! “, Snapped Richter Zickler at the fund manager. With the confession on Wednesday, according to Zickler, the process is now taking an “objectively surprising” turn. Almost caring he speaks to the dock: “You have done yourself the greatest favor that a person can do himself.”
No benefits from cum-ex deals
Let the accused speak for themselves, defense attorney Ingo Heuel told the FAZ after the hearing. “Now it is up to the court to evaluate it. In any case, our client did not participate in the income from these transactions with a single euro.
How well things went for the investors, on the other hand, among whom, according to the indictment, there are prominent German entrepreneurs with amounts in the double-digit millions, M. explained a few minutes earlier in the courtroom. Investors from Deutsche Bank in London, acting as prime broker, took out a loan of 749 million euros via a Maltese vehicle. According to him, this leverage resulted in fantastic profits within a few weeks in the 2009 dividend season: “I am assuming an arithmetical return of 30 percent.”
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