Goldman Sachs faces the wrath of British customs in one of the largest corporate tax rulings of the decade.
By Shruti Advani, Guest Contributor finews.asia
British customs has won a 79 million pounds ($102 million) tax avoidance case against Goldman Sachs and U.S. agricultural conglomerate Cargill.
The Court of Appeal ruled that the firms had dodged taxes in the UK using a scheme established more than ten years ago involving the now-defunct Teesside power station, according to a report in «The Times».
Enron Collapse
Cargill’s private equity division and Goldman Sachs took ownership of Teesside Power following the dramatic collapse of its owner, Enron, in 2001.
Teesside Power claimed hundreds of millions of pounds were owed to the plant by other Enron subsidiaries during its U.S. bankruptcy.
Serious Intent
Teesside set up a Jersey-based company to try to avoid paying corporation tax on about 200 million pounds by converting it into shares.
Although the bank has not made any official comment, the ruling will be seen by its peers as a statement of serious intent by the legislators.
