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Texas Pacific Group flees Australia ahead of the taxman

From down under we have an incredible story of a US private equity firm dodging taxes made in profit on a recent Australian IPO…and hightailing that cash out of the country before the authorities could judicially claw it back… reporting from The Australian

~~~”The ATO [Australian Tax Office] says the TPG [Texas Pacific Group] entities owe the commonwealth $452,236,874.70 in income tax and a further $226m in penalties automatically generated by assessments issued under the anti-avoidance tax provisions.”~~~

How fast can money move offshore?

Fast enough to shock the Reserve Bank of Australia into concern about the stability of several trading accounts in the payment and settlement systems…

~~~”A swath of major NAB accounts were frozen under orders issued by the Supreme Court of Victoria on Wednesday night after the ATO sought to prevent TPG from moving its Myer profits into one of two offshore companies in tax havens.

It is understood officials at the RBA contacted the trading bank on Thursday afternoon expressing concern over the systemic impact of a court-enforced suspension of several major NAB interbank trading accounts.

The frozen accounts included a Deutsche Bank settlements account whose daily trading statement would normally run to something near 65 pages, two big Myer family accounts and a Computershare settlement account.

Each was effectively suspended under Supreme Court orders, restricting access to accounts that in the past seven days had held more than $10 million of funds generated by the TPG-led, private equity consortium’s $2.3bn IPO of the Myer department stores…”~~~

The avoidance of taxes has been an increasing global concern as international firms have increasingly built offshore structures to skip on payments of taxes… TPG actions are a classic example…

~~~”The ATO applied for the court orders after issuing tax assessments totalling $678m against the two TPG-controlled entities that it regards as the taxable entities for the Myer sale profits. One of them is a Cayman Islands registered company, the other is in Luxembourg…“~~~

Good luck down under… this sort of action against large, predatory financial firms is needed in America to help get America moving again… when our public trust is not asserted against those financial entities which structure their trading and investing activities to skirt the payment of taxes we all lose faith in the protection of the public’s interest…. somehow I imagine that Texas Pacific Group has structured their  US deals in a similar offshore manner to avoid US taxes… I wonder about this one… from Health News

~~~”…Health care data company IMS Health Inc. said Thursday it is being bought by investment funds TPG Capital and CPP Investment Board for $4 billion, in a move to help the company restructure its business amid the shifting health care arena and sluggish economy.

IMS shareholders are getting $22 per share under the deal, marking a 31 percent premium to the stock’s closing price of $16.81 on Wednesday. Shares were up nearly 24 percent in afternoon trading, having earlier set a new 52-week high of $21.09 on the news.

The leveraged buyout deal, which has committed debt financing from the private-equity firms and Goldman Sachs affiliates, is valued at $5.2 billion including assumed debt, according to IMS. LBOs, which involve the buyer borrowing most of the money to fund the deal and putting up the takeover target’s assets as collateral, had fallen by the wayside during the recession as credit markets dried up. But this latest deal proves that private-equity firms are no longer sitting on the sidelines and are willing to jump back into the market…”~~~

So will green shoots in the financial space mean tax revenues for the US Treasury? Or will we be left high and dry like our cousins the Aussies? Well?

See more about tax havens in Riski…

Also according to this filing by TPG with the FSA 50% of their investors are “public funds”… I wonder if these various “public funds” would support TPG actions vis a vis the Australian tax authorities…

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