In May, August and December 2011 a group of small US pension funds applied to the German taxman for refunds totalling €123-million (roughly R1,35-billion at the time). This was for dividend withholding tax they supposedly paid earlier that year – tax they were entitled to fully recoup under a US-Germany double taxation treaty. 

The common denominator in this group of applications for tax refunds: Investec. Read Part One here

The applications were made on behalf of the Irish office of Investec’s UK arm by an international tax claim agency, supported by reams of Investec-generated paperwork including “credit advice” letters certifying that dividend tax had been deducted. 

Investec issued these in its capacity as the pension funds’ custodian bank.

The problem, according to German prosecutors, is that none of these tax payments ever happened. Instead, these applications, prosecutors claim, were really examples of the…

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