BlackRock’s Munich offices were searched by the prosecutors on Tuesday as part of the largest investigation of country’s post-war fraud.

The fraudulent practice being carried out involved the shares of the trading company around banks, hedge funds and investors for creating the impression of numerous owners who were entitled to tax rebate.

According to the spokesman of BlackRock, the biggest fund manager of the world was cooperating with the investigation completely regarding the transaction period from 2007-2011.

The inclusion of BlackRock is significant as it oversees assets worth more than $6.4 trillion which includes the shares of the company and lends to bank. The prosecutors of the State did not comment on the investigation of BlackRock. Olaf Scholz, the finance minister of Germany, has urged Europe for tightening its cooperation to curb tax schemes that are abusive. This was followed by Reuters revelation of sham trading deals due to which the taxpayers have lost billions of euros.

Various investors and banks are under investigation for sham trading. Friedrich Merz, the chairman of BlackRock in Germany, has helped to secure its influence on the industrial powerhouse in Europe and has also condemned the illicit dividend stripping.

Merz has already taken a lead to succeed Angela Merkel to lead Christian Democrats of Germany and secure their chance for running as a chancellor. Unicredit’s HypoVereinsbank was also searched by cologne prosecutors for gathering evidence against other suspects. Unicredit did not comment on German’s unit search.

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The stock trading scheme was described as a scandal by Scholz as it underscored the European cooperation’s need in one of his strongest practice that has hit Denmark, Germany, Belgium and Austria. As per the tax authorities, Denmark has already lost $2 billion and Germany’s estimated loss amount to over $5.71 billion. Danish politicians have called for action that is coordinated by Correctiv, non-profit newsroom.

Source: Reuters, Market Screener