British banking giant HSBC is set to finalise a multimillion-euro fine in a Paris court this week over allegations of dividend tax fraud.
Okay News reports that a hearing scheduled for Thursday will validate the settlement, closing an investigation linked to a widespread European scheme exposed in 2018.
A judicial source confirmed the proceedings, though details of the fine remain undisclosed officially.
Bloomberg reported in December that the penalty could reach €300 million ($350 million), which HSBC provisioned in its Q3 earnings statement for an inquiry into “dividend withholdings of certain legacy trading activities.”
The case forms part of probes launched by the Paris financial prosecutor’s office in December 2021 into six major banks, including HSBC, Credit Agricole unit Cacib, BNP Paribas and Exane, Societe Generale, and Natixis.
Credit Agricole’s Cacib became the first to settle in September, paying €88 million.
The fraud, known as “CumCum,” involves investors temporarily transferring shares around dividend payment dates to evade withholding taxes, then repurchasing them while sharing illicit gains.
Banks allegedly acted as intermediaries, sometimes charging commissions.
A related “Cum-ex” scheme is estimated to have cost European treasuries €140 billion ($151 billion) over 20 years.
The scandals were uncovered by a consortium of European media outlets in 2018, prompting raids and prosecutions.
HSBC declined to comment on the upcoming hearing.
The settlement allows HSBC to avoid further prosecution in France, following similar deals by other institutions.
