By Olivia Bugault 
 

Kering on Thursday confirmed that it is under investigation by the French finance authorities, but said it strongly denies allegations of tax fraud.

The luxury-goods conglomerate said it had no previous knowledge of the inquiry opened by the French National Financial Public Prosecutor's Office in February 2019 and that it intends to cooperate with authorities "in complete transparency and serenity."

"The inquiry appears to be linked to the potential consequences for Kering French companies resulting from legal proceedings initiated in November 2017 involving LGI, the Group's Swiss subsidiary," it said.

"The proceedings resulted in a settlement between Gucci and the Italian tax authorities in May 2019," the company said, referring to the Italian luxury fashion brand it owns.

Kering said the confirmation from French authorities about the probe comes after a press article published Tuesday.

French news site Mediapart reported that the French authorities were looking at a potential tax evasion scheme set up in Switzerland.

According to the Mediapart article, the inquiry was opened after the media reported in 2018 that Kering had allegedly avoided paying a total of 2.5 billion euros ($3.05 billion) in taxes between 2010 and 2017 in different countries thanks to this system. The mechanism would have allowed Kering to avoid paying at least EUR180 million of taxes in France, Mediapart reported.

"Kering refutes in the strongest possible terms the allegations contained in the press article and forwarded by other media," the owner of Yves Saint Laurent and Gucci said.

 

Write to Olivia Bugault at olivia.bugault@wsj.com

 

(END) Dow Jones Newswires

December 17, 2020 04:00 ET (09:00 GMT)

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