Helena Soderpalm and Johan Ahlander

STOCKHOLM, (Reuters) – The Swedish Bank SEB announced Wednesday that it was hit by a tax demand of 511 million Euros ($575 Million) from Germany. Its head office in Germany had also been raided. Both were related to the so-called cumex transactions.

According to the bank, there was no wrongdoing. They also said they would appeal against this demand.

“The transaction under review is transactions which were completed before 2016’s change in Germany’s tax law. SEB believes that the transactions were done in compliance with the then-prevailing rules,” said it in a statement.

SEB stated in separate statements that Germany’s Public Prosecutor visited Frankfurt’s bank office on December 14-15 and asked for information about alleged cumex transactions. According to the bank, it is cooperating with authorities.

According to the SEB, Germany did not offer or conduct transactions that were intended to recover unpaid tax. It said that it dissociates itself from such an arrangement, and referred to the cum-ex scandal.

This scandal, potentially Germany’s largest post-war fraud, involved a scheme to trade shares. Authorities claim it cost the taxpayers millions of euro.

The government is trying to claw back the money it believes was stolen from Germany by launching multiple investigations that involve many financial institutions throughout Germany.

Cologne German prosecutors stated in a statement that a raid took place in Frankfurt but did not name the bank.

SEB stated that it has not, according to accounting rules, made any provision at group level in relation to this matter. SEB stated further demands couldn’t be ruled out, and this could have negative financial consequences for the bank.

SEB stated that Germany’s tax authorities had requested a total amount of 936 millions euros in relation to the alleged ex-cum transactions. Legal proceedings are expected to last several years.

SEB stated last year that the German tax authority requested DSK Hyp AG, its German subsidiary to repay transparency-reported withholding taxes from over five years back. It strongly opposed this decision.

($1 = 0.8882 euros)