Argentina’s tax agency sent 50 officials to the local unit of billionaire Kenneth Dart’s Dart Container Corp. as part of an investigation into tax evasion and accused him of financing anti-government protests.
Dart Sudamericana SRL, in the province of Buenos Aires were raided by tax and customs agents seeking proof of over-billing of imports last year, Customs General Director Siomara Ayeran said outside the Dart plant in Pilar, 50 kilometers (31 miles) north of Buenos Aires.
The transactions enabled the company to reduce its tax liabilities and funnel funds to related companies abroad, and also “to finance activities against our government, like the so-called cacerolazos,” Ayeran said, referring to rallies at which protesters bang pots and pans.
Since her re-election in 2011, President Cristina Fernandez de Kirchner has cracked down on capital flight and tax evasion. Last year, tax revenue rose to a record 808 billion pesos ($158 billion), or 37 percent of gross domestic product. The 60-year-old president has also called holdout creditors such as Dart, who are trying to collect in full on their defaulted bonds, “vultures.”
Dart, president of Mason, Michigan-based Dart Container, the world’s largest maker of foam cups, is seeking $700 million from Argentina for the country’s 2001 debt default through his EM Ltd. fund, the tax agency, known as AFIP, said in an e-mailed statement. Dart gave up his U.S. citizenship in the 1990s to avoid taxes and moved to the Cayman Islands.
“Dart Sudamericana is cooperating fully with Argentina’s AFIP in their request for information,” Margo Burrage, a Dart spokeswoman, said in an e-mailed response to questions. “It is our corporate policy to comply with all Argentine laws and regulations.”
EM and NML Capital Ltd., an affiliate of the New York-based hedge fund Elliott Management Corp. run by billionaire investor Paul Singer, are pressing a multi-front case against Argentina. The dispute stems from the South American country’s default on $95 billion of bonds.
The funds have been seeking to enforce $2 billion in judgments they won in U.S. court cases.
AFIP earlier this year accused the local unit of HSBC Holdings Plc. of conspiracy to hide bank accounts, thereby helping private companies evade tax payments and launder money. The tax agency also alleges that grains exporters including Cargill Inc. and Bunge Ltd. (BG) owe the state almost $1 billion in taxes.
Locked out of international credit markets since its default, Argentina depends on tax collection and central bank reserves to finance government spending and pay foreign debt. The tax and customs agency has used dollar-sniffing dogs at ports to detect travelers carrying large amounts of money.
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