A Freshfields client is under pressure to punish its board because they instructed the firm while it was involved in the Cum Ex tax-dodging scandal.

Four current and former Freshfields partners, all of whom are understood to have worked in the firm's tax team in Germany, are currently under investigation by German authorities for helping clients double their tax rebates in a manner subsequently found to be illegal.

Known as the Cum Ex scandal, it resulted in Maple Bank, a Freshfields client, being closed down in Germany. The bank's administrators sued the firm, and Freshfields (or its insurers - Freshfields hasn't said which) paid out €50 million to settle the claim.  

There has been conjecture that other clients penalised for accepting the flawed advice will also sue, but in the meantime a client with no connection to the affair other than its use of Freshfields has been targeted.

Infineon, a giant German semiconductor manufacturer, instructed Freshfields on the €9 billion purchase of a rival in 2019. It has been forced to justify retaining one of the world's most highly-regarded firms after Jakob Ziermes, a shareholder, submitted a motion in advance of Infineon's AGM calling for fellow shareholders to refuse to ratify the board's actions during 2019.

"The board of directors instructed the law firm Freshfields, which is said to be responsible for what is probably the biggest tax robbery in post-war history, if one is to believe the serious media", stated Ziermes.


Nothing escapes a purity spiral.

He said Infineon's decision to pick Freshfields when it was known to be under investigation represented a "violation" of Infineon's Code of Ethics and its Code of Business Conduct, which stipulates, "We will not enter into a business relationship with a Partner who manifestly violates national (...) laws".

Infineon's management stood by its board and, by extension, Freshfields. In a statement it acknowledged that a former Freshfields partner, Global Head of Tax Ulf Johannemann, had been charged, and that two former partners and one current partner were currently under investigation. But it said Freshfields had reassured it that none of its lawyers working on Infineon's matters were "a party to the proceedings or otherwise involved in the Cum Ex matter", and that as a result its codes had not been broken.

Infineon said it instructed law firms based on the "expertise, experience and efficiency" of their lawyers. "On the other hand, the integrity of the lawyers working for the company is indispensable for a mandate", said Infineon, and its selection was "also based on ethical criteria". Its AGM is next Friday, giving the company seven days to divert Ziermes into a soundproof cabinet.

Freshfields declined to comment.

Tip Off ROF


Not Peanuts 14 February 20 12:25

It is estimated cum-ex trading has cost the treasuries of Europe an incredible €55bn.

Anonymous 14 February 20 12:48

I can remember when Freshfields Tax had a great reputation and won loads of awards.  Does anyone use them now or are they left to pick up the tax implications of restructuring work and twiddling their thumbs?

Anonymous 14 February 20 13:50

I wanted to form a team to get in on the Cum Ex action, but I just couldn't get the spaff.

Anonymous 21 February 20 08:06


Having used the LaTeX macros for the TeX document preparation system, I have already learned that there are things you do not consult with Google. As it is, Google ads is behaving badly as it is.

Related News