For Kering, a Swiss follow-up to the Italian tax investigation
today Mar 25, 2019
The Italian fiscal authorities’ investigation into an alleged instance of tax evasion by French luxury group Kering could potentially bounce over into Switzerland. At any rate, this is what some members of parliament for the Swiss Ticino canton are advocating, having lodged a formal complaint about the “fictitious domicile of former Gucci CEO Patrizio di Marco,” according to a report by Swiss news agency ATS last week.
On January 25, the Kering group issued a first statement on the matter. It indicated that the Italian investigation concluded that the amount of tax involved was estimated at about €1.4 billion. In mid-February, François-Henri Pinault, speaking at the presentation of the group's annual results, said that “the investigation is over, its findings have been communicated. Now comes the phase in which we will be presenting our own arguments. We have some arguments to put forward.” Pinault is notably relying on the fact that Gucci “has an operational structure which has been in place since the end of the 1990s.”
The Italian investigation followed a probe made by French media organisation Mediapart in 2017, in collaboration with the European Investigative Collaborations investigative journalism network. Mediapart's probe denounced a tax avoidance scheme involving Gucci, the Kering group's leading label, chiefly regarding the remuneration of Gucci’s CEO Marco Bizzarri and his predecessor Patrizio di Marco, involving a Luxembourg-based company and a tax domicile in Switzerland. Part of the Kering group's business, notably that of its Luxury Goods International subsidiary (LGI), specialised in distribution and logistics services for many of the group's labels and cited in the Mediapart report, is based in Lugano, in Switzerland's Ticino canton.
Matteo Pronzini, a member of the Ticino canton’s parliament, lodged a formal inquiry with the canton's government following the Italian tax authorities’ report. He notably asked a specific question on January 27: “Gucci case: which checks [are made] on the domicile of global businessmen and managers?” as reported by Swiss newspaper La Tribune de Genève.
Mediapart followed up on the matter and, in an article dated March 21, wrote that the Swiss cantonal MP “filed with the Lugano prosecutor, on Wednesday, a criminal complaint against the CEO of Gucci, Marco Bizzari, and his predecessor, Patrizio Di Marco.” Pronzini and his party, MPS, claimed they have incriminating documents against Gucci's senior managers, accusing them of having obtained fiscal domicile in Ticino. According to Mediapart, the group has facilitated this operation.
According to the ATS agency, MPS indicated that it expects the new cantonal parliament, which will be instated following elections on April 7, to shed light on the fiscal position of Kering and its managers in Ticino, via LGI. The left-wing party also “asked the public prosecutor to start an investigation to verify whether the fictitious domiciles of Patrizio di Marco and his predecessor Marco Bizzarri are and were fraudulent.” “If that was the case, the fact would amount to a criminal offence liable to a sentence of up to three years in jail,” stated ATS.
The matter is also being investigated at federal level in Switzerland. Last year, the Swiss Confederation's Public Prosecutor’s office said that criminal proceedings, in connection with the Italian investigation of the Kering group, had indeed been initiated, regarding alleged crimes of money laundering and document forgery.
The Kering group was contacted by FashionNetwork.com about the progress being made in Switzerland on these fiscal matters, but declined to comment on the issue.
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