French prosecutors launch tax fraud probe into corporate giants
PARIS (AP) — Paris prosecutors opened a probe yesterday into whether oil giant Total SA, tyre company Michelin SA, and the French operations of sportswear maker Adidas committed tax fraud through bank accounts in Liechtenstein, a judicial official said.
The sensitive preliminary investigation comes amid increasing pressure on Liechtenstein and other countries considered tax havens — a topic high on the agenda as world leaders seek solutions to the financial crisis at the Group of 20 summit in London this week.
Total, Michelin and Adidas denied holding any foundations or accounts in Liechtenstein.
French customs investigators will carry out the probe into the three companies and several individuals based on an alert from the Finance Ministry, the judicial official said, on condition of anonymity because the investigation is under way.
The December alert noted "atypical movements" starting in 2001 on accounts at LGT bank in Liechtenstein. The accounts were in the name of foundations or trusts believed linked to Total, Michelin and Adidas, the official said.
Six of the foundations are believed linked to the founding family of Adidas, and one linked to Elf Trading, a branch of Elf Aquitaine, which was bought by Total in 2000. French tax authorities suspect another foundation is linked to Michelin, the official said.
A total of 64 French companies attracted attention for possible fraud involving bank accounts in Liechtenstein, France's budget minister, Eric Woerth, said. Most were privately-owned family companies with a long history of banking in Liechtenstein and have now paid taxes due to French authorities.
However, French tax authorities were unable to get to the bottom of the activities of the other three, so they were turned over to the Justice Ministry for further inquiry, Woerth said.
The French cases came to light in 2007 and 2008 as a result of inquiries by German and British authorities.
French President Nicolas Sarkozy recently said France would crack down on money laundering and tax evasion through European tax havens, including Liechtenstein, Luxembourg and Andorra.
With governments straining to pay for bailouts and fiscal stimulus, about 35 offshore tax havens worldwide are facing increasing pressure to be more open.