PRESS ANNOUNCEMENT
6 DECEMBER 1991
6 RGENTlNE GOVERNMENT EXCISE CLAIM SETTLED UNDER
DURESS
Nobleza-Piccardo, the 70% owned subsidiary of
B.A.T Industries in
Argentina, has decided under duress to settle a
Government cTaim for
excise payments which have already been covered by
tax credits. The
Government maintains that the tax credits were
fraudulently created,
p.rincipally by Koner-Salgado, the main group of
companies from which
they were purchased, between April 1987 and
February 1988.
The fraud was publicly exposed in 1988, when first
executives from
the Koner-Salgado group and subsequently tax
officials were charged,
even though the Government had been aware of these
frauds since 1985,
as a result of its own audit report. Despite the
evidence, the
Government turned a blind eye and continued to
accept tax credits
generated by Koner-Salgado.
Nobleza-Piccardo has been forced to participate in
a moratorium
introduced by the Government in November covering
the tax credits
concerned. The company will pay the equivalent of
US$37.6 million
over the next five years.
B.A.T Industries, a major foreign investor in
Argentina, is dismayed
at the Argentine government's action which it
considers to be
oppressive since the Government has produced
absolutely no evidence
of Nobleza-Piccardo's complicity in the affair.
Nobleza-Piccardo has
throughout acted in good faith and is an innocent
victim of the
fraud.
Participation in the moratorium does not prejudice
Nobleza-Piccardo's
rights to eventua) compensation from the
Government through
administrative proceedings or from private
entities whose actions are
in any way responsible for the position in which
the company finds
itself.
At the B.A.T Industries level, provisions of US$20
million had
already been made in the accounts for the nine
months ending
September 30, 1991 and a further US$17.6 million
will therefore have
to be provided in the fourth quarter.
. ends -
For further information, please contact:
B.A.T Industries Michael Prideaux
Nigel Gourlay Tel. 071 222 7979
rNJ
cr,
-P.
10
03
BAT Industries document for Province of British
Columbia 23 April 1999