Glencore Investigated by Italy on $158 Million Tax-Evasion Claim
Glencore Xstrata Plc (GLEN), the world’s largest exporter of power station coal, is being investigated by Italian tax police, which accused the group of evading more than 120 million euros ($158 million) in taxes.
The authorities are reviewing some transactions between its Portovesme unit, a zinc and lead smelter on the island of Sardinia, and the larger group, Baar, Switzerland-based Glencore said today in an e-mailed statement.
“All transactions were conducted in accordance with applicable Italian tax laws and on an arm’s length basis between Portovesme and the Glencore group,” it said. “Portovesme continues to engage with the tax authorities to ensure a swift conclusion to the review.”
The company allegedly hid profits by paying other units of the Swiss company above-market prices for raw materials, the Rome financial police said in a separate e-mailed statement that gave the amount under investigation, without naming the company.
“The attention of the financial police was aroused because the company was created through an extraordinary operation and since its creation has never declared profit, only fiscal losses, a situation that seemed strange given the important international role it had taken on and given the profits registered by the Swiss company that it belonged to,” the police said in the statement.
Glencore Xstrata is the world’s fourth-biggest mining company.
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