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Financial Times: TNT launches tax probe: "The Netherlands has seen its share of accounting scandals, notably the reserves crisis at Royal Dutch Shell and a near-1bn fraud at Ahold, the grocery group, which led to criminal charges against senior management.": Saturday 24 Sept 2005

By Ian Bickerton in Amsterdam
Published: September 24 2005

TNT has launched an independent investigation into suspected "illegal acts" related to tax matters at a number of subsidiaries, fuelling concerns that the Dutch post and logistics company could face up to 400m ($480m) in fiscal claims.

 
 
 

Shares opened more than 8 per cent lower - stripping more than 800m from TNT's market capitalisation - after it said the affair might damage its results and its financial position.

The development came only days after the company announced the resignation of Jan Haars, its chief financial officer, following "differences in management style".

TNT said yesterday the two events were unrelated.

The Netherlands has seen its share of accounting scandals, notably the reserves crisis at Royal Dutch Shell and a near-1bn fraud at Ahold, the grocery group, which led to criminal charges against senior management.

TNT said investigations launched last year inconnection with a taxdispute with the Inland Revenue, the UK tax authority, had now revealed "thelikelihood of illegal acts relating to certain past tax matters" in the UK and at other un-named non-UK subsidiaries.

The initial UK inquiry related to inadequate information provided to tax authorities since the late 1990s by a holding company through which TNT raised finance. The affair delayed publication of TNT's 2003 annual accounts and led to a 59m charge in March last year.

TNT's audit committee, aided by external legal advisers, widened its probe in the wake of that affair to consider other UK tax matters that arose during the same period.

It is that inquiry that has unearthed suspicions of illegal acts across a broad front and triggered moves to appoint an independent team to investigate.

"The outcome of these investigations may have a material impact on TNT's results and financial position," the company said in a statement.

TNT added that ithad made clear in its2004 annual report the potential for fiscal claims or penalties of between zero and 400m in relation to the tax probe.

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