Many of the world’s largest private equity firms face an investigation into strategies that may have helped them to avoid paying hundreds of millions of dollars in US taxes. The groups being investigated by New York’s attorney-general, Eric Schneiderman, include Bain Capital –– KKR and Apollo Group, a person familiar with the investigation said. Mr Schneiderman has issued subpoenas as part of an investigation into the fee-waiver strategy, in which executives invested management fees paid by investors back into one of the investment funds. Any profits on those fees would be taxed at the capital gains rate – a much lower tax rate than if it were treated as ordinary income. There is debate over whether the strategy is legal, aggressive or illegal. (Financial Times)*
‘Misled’ investors line up to sue RBS for £3 billion over rights issue
Shareholders in Royal Bank of Scotland (RBS) are in talks with litigation funds with a view to launching a formal £3.3 billion lawsuit against the bank and its former chief executive, Fred Goodwin, within weeks. If they can secure the necessary £12-£15 million to pay for insurance against the cost of defeat, a writ will be issued by early October, according to sources familiar with negotiations. HSBC, Deutsche Bank and State Street are among 91 institutional investors understood to be backing the ‘RBoS Shareholders Action Group’, which accuses the bank of misleading investors at the time of a landmark £12 billion rights issue in 2008. (The Times)*
Environment
Solar firms take FiT damages claim against DECC to High Court
Solar firms are taking the UK Government to the High Court over losses they claim they incurred as a result of unlawful cuts Ministers tried to impose to the Feed-in Tariff (FiT) last year. The High Court claim, amounting to over £2 million in damages, has been issued by lawyers on behalf of three solar firms- Solarlec PV Solutions, Crystal Windows and Doors Limited and Solar Power PV Limited. The High Court action is being taken after the Department of Energy and Climate Change (DECC) this month refused to settle out of court. The damages claim centres on an attempt last year by DECC to make retrospective cuts to the FiT for solar electricity. (Green Wise Business)
Green bank ready to commit £3 billion to environmental firms
The Government's £3 billion flagship scheme to encourage private sector money into low carbon technology and green initiatives is on the hunt for projects with which to formally launch in October. Officials preparing the launch of the Green Investment Bank are understood to have met with a number of businesses about committing cash to a number of environmentally friendly schemes, such as recycling plants. The bank has been given the objective of helping the UK transform itself into a low-carbon economy. The officials are also looking at other initiatives, including offshore wind, waste recycling facilities, and energy-from-waste projects. (The Independent)
COMMENTS