25 Million in Focus: Trial of Matthias Kühn in Palma and What the Island Should Learn

A court date that concerns more than numbers

On the morning of 20 October 2025, Via Alemania was unusually quiet. A few tourists pulled their jackets tighter, the coffee aromas from Passeig Mallorca mixed with the smell of chlorine from a nearby construction site — and a handful of photographers and onlookers gathered in front of the courthouse. At the center: the German investor Matthias Kühn. The accusation is that liabilities to the Spanish tax authority of around €25 million were not properly disclosed.

The key question: accounting clumsiness or deliberate circumvention?

Investigations have been ongoing for more than two years. The public prosecutor's office and tax authorities are examining fund transfers within a corporate network — Spain, Liechtenstein and apparently other destinations play a role. The central question the court must answer is not only: Were numbers reported incorrectly? But: Was the system structured in a way that deliberately avoided tax obligations?

There is another detail: the court ordered a security bond of around €33 million. Appeals have been filed against this order. Such sums are not only legally explosive; they also cast a harsh light on the entanglements in Mallorca's real estate world.

Who else comes into focus

The hearings are scheduled over two days. Kühn is to testify first, followed by several named witnesses — including family members, advisers and lawyers, such as Jorge Sainz de Baranda. So this is not a single-person case, but a web of statements, contracts and bank movements that must be examined.

Interesting and often underemphasized in public debate is the role of service providers: tax advisers, trustees and banks. They are not merely background figures. Their documentation, checks and advice often decide whether a structure is legally clean or slips into a grey area. If it turns out that external advice created loopholes, questions would also be raised about the industry.

What this could mean for Mallorca

For the island, such proceedings are more than gossip. Mallorca depends on construction projects, investments and foreign capital. When a prominent investor becomes the subject of tax investigations, there are several effects: mistrust of project financing grows; authorities and administrations become more cautious with approvals; and local companies could be tainted by association even if they operate lawfully.

This becomes clear in conversations on site. A woman walking her dog on the Passeig dryly said, "You hear a lot, but you know nothing." That is the problem: rumours mix with legally verifiable facts. As long as the judiciary does not provide clarity, a shadow remains over projects and investments.

The blind spots of oversight

In many cases it is not only the main actors, but cross-border structures that make oversight difficult: complicated holding arrangements, accounts in multiple jurisdictions, and advice from firms in tax havens. What is often neglected here is the question of responsibility — who audits the auditors? And how can local authorities ensure transparent ownership structures before large construction projects are given the green light?

Another point: evidentiary documents are often located in different legal systems. Cooperation between Spanish authorities and institutions in Liechtenstein or other countries is time-consuming and politically sensitive. That delays clarification and weakens public trust.

Concrete steps that would make sense now

The court can clarify the case legally. For the island society, measures go beyond that. Some practical proposals:

- More transparency in property purchases: Mandatory disclosure of the true beneficial owners before approvals. No big deal without a clear ownership structure.

- Stronger checks by awarding authorities: For public contracts, independent audits and financial guarantees should be mandatory.

- Better international cooperation: Simplified channels of information between tax authorities could speed up investigations.

- Raising awareness among local actors: Construction companies, banks and brokers must strengthen their compliance — not only for legal reasons, but to regain the trust of the neighbourhood.

Outlook

The upcoming hearings will show whether these are serious violations or complex but legally permissible constructions. Regardless of the outcome, the lesson is clear: Mallorca needs more transparency in the real estate world. After all, it's not just about millions in bank accounts, but about the integrity of entire projects, jobs and how we do business together on the island.

I will follow the trial and report further as soon as new details emerge from the courtroom.