(Bloomberg) -- German financier Lars Windhorst said Germany's watchdog Bafin cleared him from allegations that a financing vehicle he set up to pay back investment firm H2O Asset Management breached banking rules.
“Today, with the approval of the German Federal Financial Supervisory Authority BaFin, I have repaid loans totalling EUR 132.5 million, which Bafin believes would have required a licence under the German Banking Act,” the financier said on his Twitter account.
At the heart of Bafin's probe was Evergreen Funding, a company Windhorst created to raise money and buy back bonds from London-based H2O, and its dealings with his holding company Tennor. A Berlin prosecutor, who has initiated the investigation after a complaint from German financial regulator BaFin, is now likely to drop the case.
A spokesperson for BaFin didn't immediately return calls and emails requesting comment.
Bafin's approval provides some relief for Windhorst and possibly for his Tennor Holding BV, for which a Dutch court has appointed an insolvency administrator only days ago in response to a creditor filing.
The German regulator's probe was the latest twist in a two-year saga surrounding the links between H2O and Windhorst. The Evergreen trade was an attempt to sever those ties, by allowing the asset manager to extricate itself from its holdings of bonds from companies with links to Windhorst.
When investors initially found out about the investments they pulled billions of euros from H2O funds, triggering a crisis of confidence in the asset manager and prompting its managers to reach a deal with Windhorst to buy the bonds back.
©2021 Bloomberg L.P.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
