Ikea and eBay join leading companies under tax spotlight
Pressure is mounting on large multinational companies to pay their fair share of tax following new revelations about the amount of tax paid by eBay and Ikea. The focus on the tax affairs of the two companies comes amid increasing anger about Starbucks which, as Reuters exposed last week, has not paid corporation tax in the UK for the past three years. eBay and Ikea are the latest companies to face scrutiny after the Sunday Times reported that eBay legally channels payments through Luxembourg and Switzerland to avoid paying nearly £50m in tax in Britain. Ikea is said to have legally halved its corporation tax bill in the UK by siphoning off profits abroad in the form of royalty payments to a sister company. (Guardian, Independent)
Kingfisher Airlines loses licence
Growing fears over passenger safety have led to Kingfisher Airlines being stripped of its flying licence. The head of India’s civil aviation, said on Saturday that Kingfisher’s operating permit had been suspended until the airline, which has debts of at least $1.4bn, is able to demonstrate that its finances are sufficiently stable to deliver a “safe, efficient and reliable service”. Once India’s second-biggest domestic airline, Kingfisher has not paid its staff or pilots’ salaries for nearly eight months. (Times*)
Court in Ecuador freezes Chevron’s bank accounts
Last week an Ecuador court froze all bank accounts of Chevron and its subsidiaries in the country as part of seizure actions stemming from a $19bn judgement against the oil company for causing environmental contamination in the Amazon rainforest. The decision to freeze an estimated $200bn is due to suspicions that Chevron’s CEO and General Counsel lied to shareholders when they claimed that the company had no assets in Ecuador. Separately, Ecuadorian villagers in May and June this year filed seizure actions in Canada and Brazil targeting billions of dollars’ worth of Chevron assets, including refineries, offshore oil platforms, and oil production facilities. (CSR Wire)
Responsible Investment
Investors push for greener oil sands
A group of 49 investors with more than $2tn under management is launching an initiative on Monday to put pressure on companies operating in the Canadian oil sands to improve their environmental performance. The investors accept that production from the oil sands of Alberta, Canada, is going to rise, but want companies active in the region, such as BP, ConocoPhillips, Royal Dutch Shell, Statoil and Total to curb their greenhouse gas emissions and water use. The initiative is backed by fund managers such as Ceres,Dexia Asset Management and Trillium who fear that environmental impacts could create a significant threat to future earnings, for example if production has to be curbed as a result of water shortages. (Financial Times*)
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