Police seize assets in Italy fashion group tax probe

Reuters News

11/5/2012 6:03:07 PM - Reuters News

MILAN (Reuters) - Italian police have seized assets worth 65 million euros ($83.5 million) in a tax probe involving the 5.3 billion euro sale of fashion houses Hugo Boss and Valentino in 2007.

Italy's tax police said on Monday they had confiscated real estate, land and corporate holdings of 13 people "linked to one of Italy's most important families in the fashion and textile sector."

A person familiar with the investigation told Reuters the 13 people in question were linked to the Marzotto group, and included members of the Marzotto family.

Marzotto sold Valentino Fashion Group - then including both the Valentino label and Hugo Boss - to private finance group Permira in 2007.

Those under investigation are suspected of not having filed tax returns.

The Italian government has set fighting chronic tax evasion as one of its priorities as it seeks to come to grips with the country's towering debt crisis and find resources to fund growth.

Lawyers representing the Marzotto family said the decision taken by Milan prosecutors ordering the seizure was "totally groundless".

The lawyers said bank documents showed capital gains from the operation had been declared and taxed.

"I acknowledge the seizure measures. I think it right only to point out that I did not have any operative position in the company in which I was minority partner," Matteo Marzotto, a board member of the textile family group, said in a statement.

The technocrat government of Prime Minister Mario Monti has described the fight against tax evasion as a state of war and has stepped up monitoring and collection efforts.

Earlier this year the head of Italy's Inland Revenue service, Attilio Befera, said tax evasion totaled some 120 billion euros.

A spokesperson for the Marzotto Group declined to comment, saying the news did not involve the company or any of its units.

Police said in a statement the probe revealed that a Luxembourg-based holding company used by the Marzotto Group in the sale made a capital gain of nearly 200 million euros, resulting in tax evasion of 65 million euros.

"The investigation... revealed that a financial holding company purposefully created in Luxembourg was instead administered from Italy," the police said. ($1 = 0.7785 euros)

(Reporting by Sara Rossi, Stephen Jewkes and Antonella Ciancio; editing by Patrick Graham and David Cowell)