- Banking and wealth management firm, Investec has found itself in the middle of a probe into tax fraud
- The company is said to have participated in 'cum-ex' withholding scam that led to European governments losing out on billions
- A senior official at the firm as well as some employees are said to have been involved in the scheme
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JOHANNESBURG - Investec, a banking and wealth management firm, was named in a scathing investigation for its role in fraudulent deals involving millions of euros.
The company was involved in what has been dubbed 'cum-ex' withholding scam that saw European governments losing out on taxes.
According to IOL, cum-ex is an investment banking jargon term for a sophisticated form of trading "strategy." In this strategy, individuals or companies would buy and sell shares among each other, prior to and after companies declare their dividends on the stock list.
The goal is to claim a withholding tax on a dividend that was paid out and then claim compensation twice.
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It has been alleged that one of the senior staff members had given approval for Investec to participate in the fraud scheme. Other employees are also said to have been aware of the scheme.
Investec was implicated along with elite banks and lawyers from across the world.
Sandile Shezi: Bitcoin trader wanted for defrauding investors of more than 1 million
Briefly News previously reported that the South African Police Services has issued a warrant of arrest for a cryptocurrency trader Sandile Shezi who allegedly scammed one of his investors of half a million.
Shezi is also known for claiming to be a millionaire and being a foreign currency trader. He also has a firm called Global Forex Institute that host seminars for people interested in trading.
According to a report by the City Press, the investor 29-year-old Shezi swindled out of money is a man named Allan Ledwaba from Johannesburg.
Since Shezi seemingly had R89 million and also drove luxury cars, Ledwaba decided to loan money from his father so that Shezi could trade on his behalf.
Ledwaba invested a total of R500 000 with Shezi and the arrangement that Shezi would pay out profits to Ledwaba on a yearly basis, according to MyBroadband. Since making his investment, Ledwaba says he has only been gotten back R40 000 from Shezi.