Kering, the latest leak on the triangulations with Luxembourg

Kering, the latest leak on the triangulations with Luxembourg

In 2018 Kering would have paid salaries of 78 million euros to “mysterious beneficiaries”, presumably managers of the group, through Castera, a company based in Luxembourg. In this way it would have paid “less than 1% of social contributions”, while they would have been “at least 10% if the emoluments had been paid in France”.

This is the content of the latest leak on Kering’s financial practices, a group that manages (among others) Gucci and Yves Saint Laurent, as reported by Le Monde in the context of the OpenLux investigation, conducted in collaboration with other newspapers.

Latest leak

Kering, claims the investigation, would have organised “an offshore remuneration system”. The French group is not new to this type of accusation. It is a December news that it would be under investigation in France for tax evasion. While in 2019 it closed an agreement with the Revenue Agency to resolve a dispute over an alleged tax evasion system developed between 2011 and 2017.

Kering, returning to Le Monde’s investigation, “acknowledged that several managers of the companies of the group were hired and paid” by Castera. Among these there would be neither the CEO François-Henri Pinault, nor “his right hand man” Jean-François Palus.

Kering’s position

Kering explains to AFP agency that having branches in Luxembourg “is normal for an international group present in more than 60 countries”. In this sense, the group feels in a secure position: “The activity of these companies, of which the number is very limited and their existence is linked to historical reasons, is perfectly legitimate and legal”.

In any case, according to Le Monde, the payment system through Castera was abandoned in March 2019. When, that is, Kering transferred “most of the activities” from Luxembourg to the Netherlands.

“Another tax haven – says French press – slightly more opaque, where it has no obligation to publish its accounts”.

Again to AFP, which asks for an account of the rumours about the request by the French tax authorities for 150 million euros “as part of a tax adjustment on its subsidiary French Yves Saint Laurent”, Kering respond that “fiscal secrecy does not allow to confirm or deny these figures”.

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