The accountant, Ikea and the Russian allegations

Tuesday, 1 August 2017, 12:47 pm

Remember Betaville's tale about how Deloitte had got itself in a bit of a pickle after one of its top bean counters publicly criticised the Icebreaker tax avoidance scheme that the firm itself was defending in the British commercial courts?

Click on the link below if you don't:

https://www.betaville.co.uk/news/the-accountant-the-tax-avoidance-scheme-and-the-magazine/

Well, now the article that landed Deloitte in such hot water - http://www.taxadvisermagazine.com/article/could-it-be-magic - has vanished into thin air, implying the accountant has reached some sort of settlement with some of the parties involved.

That's good news for Deloitte but these days the accountant is being dragged from one controversial situation to the next, with the accountancy group now at the centre of a rather fruity bust up that involves the Swedish furniture giant Ikea and the Russian authorities.

In case you don't recall, back in 2014 the Russian Investigative Committee - the equivalent of the FBI - raided the offices of Ikea just outside Moscow following the Swedish company's dispute with a group of collective farmers (now called the Joint Agricultural Enterprise) over some land in the Khimki district of Moscow acquired several years ago. Here is the link to the Financial Times piece on the subject:

https://www.ft.com/content/669df59e-3aa1-11e4-a3f3-00144feabdc0

Betaville's sources say that Deloitte was asked by Ikea in 2007 to review Ikea's Russian property deals between 2003 and 2006. According to Betaville's moles, Deloitte concluded the division had carried out several transactions with "no clear business objective" and that "construction begins on land plots for which legal rights are not fully acquired".

Ikea's row with the Joint Agricultural Enterprise is still rumbling on in the Russian courts. But it sounds like Ikea's new chief executive, Jesper Brodin, is likely to want to speak to Deloitte when he starts in September!

A spokesperson for Ikea said:

"Since this [Deloitte] report is still not known to us, we cannot comment on the information you have provided. For us, the main-issue remains that the Supreme Court ruled in our favour in June 2016. Since then, the opponent, CAE Khimki, has re-opened the case, but we do not comment on ongoing legal cases. Our stance is that IKEA Group in Russia, as in every other market where it operates, acts in full compliance with existing legislation, and we will continue to protect our lawful right to the land-plot in question."

A spokesperson for Deloitte declined to comment...

[Disclaimer - the information on Betaville does not consitute any form of investment recommendation and is not intended to be relied upon by readers in making, or refraining from, any investment decisions].

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