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French supermarket giant suspected of major tax evasion in Russia – RBK

Auchan could face a heavy fine following an on-site inspection, the outlet has said

Russian tax authorities could hit French supermarket chain Auchan with a fine of nearly $2 million over suspected fraud, RBK reported on Tuesday, citing the company’s financial data.

The Russian Federal Tax Service (FTS) conducted an on-site inspection of the retailer last year, focusing on its activities in the 2020–2021 financial years, the outlet said. A report on Auchan’s Russian subsidiary indicated that in the event of an FTS decision based on the inspection results, the retailer could additionally be levied 180.9 million rubles ($1.96 million) over unpaid taxes, RBK said. Of this sum, the tax adjustment would cover 125.9 million rubles ($1.36 million).  

The reason for the on-site scrutiny has not been disclosed. RBK noted, however, that the first deputy chairman of Russia’s State Duma Committee on Security and Anti-Corruption, Andrey Lugovoy, had called for an inspection in February 2023, citing the need to check the disguised commercial activity of the company in Russia. Lugovoy said he wanted to verify information he had received about Auchan’s use of “illegal methods of tax optimization,” according to RBK. 

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Auchan’s parent company, French retail giant Association Familiale Mulliez, opted to keep the supermarket chain running in Russia despite sanctions and criticism in the West. The group also owns home improvement chain Leroy Merlin, sportswear retailer Decathlon, and fashion outlet Kiabi.  

It is not the first time the Mulliez family’s operations have drawn the attention of tax authorities. In 2016, a series of searches of the group’s properties were carried out in France, Luxembourg, and Belgium over suspected tax evasion and money laundering, Liberation reported. Tax authorities particularly targeted the border town of Nechin, where several family members resided to pay less taxes. The residence of Patrick Mulliez, founder of the ready-to-wear brand Kiabi, was reportedly searched.  

In 2019, chemical manufacturer Soderec, which also belongs to one of the most influential families in France, was ordered to pay a recovery of €88.8 million ($95.6 million), according to online media La Lettre. The adjustment reportedly covered the financial years 2010, 2011, and 2012.   

The Mulliez family is among the richest in the world, with a collective net worth of $34.3 billion, according to Bloomberg. The family patriarch, Gerard Mulliez, founded Auchan in 1961.

April 03, 2024 at 07:01PM
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