Tags: cadbury | phantom factory | taxes | india

Cadbury Claimed Phantom Factory to Avoid Taxes, India Charges

By    |   Thursday, 07 Mar 2013 04:18 PM

Confectioner Cadbury has been accused of building a phantom factory in India to avoid paying $46 million in taxes, the Wall Street Journal reported.

Based on a government-led investigation, Indian officials charge that Cadbury, which operates several facilities in India, attempted to take advantage of a 2010 tax exemption for businesses that construct new factories.

According to MSN Money, India maintains that Cadbury only added an additional floor to an existing facility in the northern Indian industrial town of Baddi, where Dairy Milk chocolates and the cocoa drink Bournvita are produced. The factory originally opened in 2005.

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Government investigators contend that it would have been impossible for Cadbury to build such a facility in the given timeframe, considering the building lacked necessary government approval.

The U.S. Securities and Exchange Commission has launched an investigation into whether Cadbury bribed Indian officials in connection with the phantom plant. If the investigation concludes that such bribes took place, the action would violate the Foreign Corrupt Practices Act which forbids U.S.-listed companies from bribing foreign officials, MSN Money reported.

After acquiring Cadbury in 2010 for a reported $19.6 billion, Kraft Foods divided its company between its North American grocery company which retained the Kraft Foods name and its global snacks company, Mondelēz International Inc., which Cadbury is under.

Mondelēz International said it would cooperate fully with the investigations.

In 2009, Cadbury earned $400 million in sales in India.

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According to Mondelēz, sales in India have increased by 20 to 30 percent a year since 2009, which presently puts the company's earnings at $700 to $800 million a year, MSN Money reported.

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Confectioner Cadbury, purchased by Kraft Foods for $19.6 billion in 2010, has been accused of claiming a phantom factory in India to avoid paying $46 million in taxes
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2013-18-07
Thursday, 07 Mar 2013 04:18 PM
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