Amtel Minimised Taxes

Russian-Dutch tyre maker Amtel-Vredestein has admitted to using tax optimisation schemes up to 2002, according to Russian newspaper Vedomosti. The report refers to a period before Amtel bought Vredestein and comes after Amtel-Vredestein set an indicative range of $13 to $16 per Global Depositary Receipt in its London IPO, which is expected to raise around $300 million and value the company at $1.2 billion.

According to a Moscow Times report, Amtel-Vredestein had declined to make any statement, citing a pre-IPO “quiet” period. The newspaper quoted a company document sent to investors as saying: “Mainly in the period up to 31 December 2002, in certain departments of the group, special companies…were created with the objective of minimizing tax and customs payments.”

The practice of “tax optimisation” strategies were common in Russia before tax inspectors hit Yukos last year with huge back tax claims linked to the use of tax havens. The claims, which eventually led to the breakup of Yukos, went back beyond a three-year time limit, after which such activities could not be prosecuted.

In a ruling in July, the Russian Constitutional Court found that such crimes, even if committed over three years ago, could be prosecuted if a suspect acted in bad faith.

The court ruling created uncertainty, Vedomosti quoted one investment banker as saying, and thus requires Amtel-Vredestein to disclose any potential tax-related risks to avert possible shareholder litigation.