German Chancellor Olaf Scholz would be questioned for a second time by a state parliamentary committee in Hamburg investigating the sprawling Cum-Ex trading scheme to defraud tax authorities.

The Cum-Ex scandal saw traders in Europe use a legal loophole to shift shares back and forth at high speed between parties around the time dividends were paid out.

They were done to receive tax repayments for taxes they had not paid.

In Hamburg, the focus was on whether Mr Scholz or other leading Social Democrats used their influence to help spare Warburg Bank from paying back €47 million ($47 million) in taxes.

Mr Scholz, who denies using his office to help the private Hamburg-based lender that participated in the Cum-Ex scheme, has been shadowed by the affair that dates back to his time as mayor of the northern city.

Parliamentary Investigation Committee of the Hamburg Parliament wants to know more about three meetings between Mr Scholz and the Warburg Bank’s co-owners, Max Warburg and Christian Olearius, in 2016 and 2017.

Mr Scholz admitted to the meetings during his first grilling but stated that he could no longer remember the content of his talks.

According to Mr Olearius’ testimony, after the first meetings, Mr Scholz had recommended sending a letter of defence to Hamburg’s then state minister of finance Peter Tschentscher.

In which the recovery of €47 million in wrongly refunded capital gains tax was presented as unjustified.

Mr Tschentscher, now Hamburg’s mayor, then forwarded the letter with the request for information on the state of affairs to the tax authorities.

It was decided a short time later, contrary to original plans, to allow the €47 million claim to be scrapped due to a statute of limitations.

Mr Tschentscher, also a member of the centre-left Social Democrats, has confirmed the forwarding of the letter.

However, he described the accusation of influence as baseless.

Opposition parties have criticised Mr Scholz for his lack of transparency over the affair.

The leader of the Christian Democrats (CDU), Friedrich Merz, said it was implausible that Mr Scholz had forgotten the content of the talks, given their importance and the sums of money involved.

Fellow CDU politician Richard Seelmaecker went so far as to call for Mr Scholz’s resignation, along with that of Mr Tschentscher.

Left party leader Dietmar Barsch, also talking to the Handelsblatt, spoke of a cloud of mistrust hanging over the chancellor.

However, Mr Scholz received the firm backing of Finance Minister Christian Linder, who told the Rheinische Post daily that he had absolute trust in the chancellor.

The committee was scheduled to begin questioning Mr Scholz at 2:00 p.m. (1200 GMT). 

(dpa/NAN)