A French appeals court on Monday dropped a case against JPMorgan Chase for allegedly aiding tax fraud at the Wendel investment group, citing clerical errors, sources at the prosecutors office said.

Prosecutors, suspecting the US bank of helping Wendel top managers to hide more than 300 million euros ($368 million at current rates) from the French taxman in 2007 and 2008, in 2016 ordered it to stand trial for "complicity in tax fraud", alongside current and former Wendel top brass.

The latter included former chairman Jean-Bernard Lafonta and Ernest-Antoine Seilliere, who for seven years also ran French employers lobby group Medef.

 

But appeals by JP Morgan prevented the trial from taking place until, on Monday, the Paris appeals court cancelled proceedings "because of problems with procedure and the notification of rights", a source close to the case said.

This does not, however, necessarily mean the end of the case for JP Morgan, a judicial source said.

A higher Paris court could still ask the French financial crime squad to investigate further, possibly leading to a reopening of the case, the source said.

The investigation against JP Morgan was launched in June of 2012 after the French tax authorities discovered a financial instrument called Solfur which yielded a net 315 million euros for its shareholders -- including three Wendel board members and 11 top managers at the firm -- for an initial investment of just 996,250 euros.

The gain was "completely tax-free", according to a 2015 document by the financial fraud squad which suspected tax fraud

Source: AFP