Actually, things could hardly have gone better recently for the Düsseldorf-based securities specialist Lang & Schwarz: The listed trading venue operator and derivatives trader had benefited noticeably from the boom on the stock markets and from the fact that suddenly many more private customers were trading in derivatives in Germany. In 2020 the company announced its most successful business year in the company’s history. Between the beginning of 2020 and the beginning of 2021, the share price of the securities specialist increased thirteen-fold. And the success has continued into the new year so far.
On Wednesday, however, the Lang & Schwarz share temporarily fell 36.5 percent to EUR 81.60. The company had announced the previous evening that the general meeting scheduled for Thursday would have to be postponed at short notice. The background to this is a tax audit in connection with tax criminal investigations, the company announced, but without naming a new date. The fiscal years 2007 to 2011 would be examined in the tax audit, according to the Lang & Schwarz announcement.
There is a suspicion that responsible persons in the company would have unlawfully offset or reimbursed for unpaid capital gains taxes and solidarity surcharges during these years. On Monday evening, an interim report from the tax office for criminal tax matters and tax investigations in Düsseldorf on a tax review of the capital gains tax credit of Lang & Schwarz Aktiengesellschaft for the financial years 2008 to 2009 was received. It was therefore necessary to postpone the general meeting. A report for the other affected years is still pending, and the review has not yet been completed. The company did not say exactly what the audit was about, but the focus should be on cum-ex transactions, i.e. prohibited share transactions at the expense of the state treasury. So far it was not known that Lang & Schwarz had participated in these deals in any way.
The board of directors considers the allegations “in accordance with a group tax audit that was completed in 2015 without any complaints” to be unfounded overall. However, it could be that the “behavior of Lang & Schwarz Aktiengesellschaft and its responsible persons will be assessed differently from a tax perspective” and that amendments will be issued. Therefore, the company wants to set aside 45 million euros. This provision is to be formed from the consolidated profit of the first half of 2021, but will have an impact on the planned dividend payment for 2021. The result could now be 61 million euros lower.