Italy’s Marzotto family being investigated by prosecutors

As part of its efforts to crack down on tax evaders, the Italian government is investigating whether nine members of the Marzotto family and four managers dodged 65 million euros in income taxes in 2007 when they sold the Valentino fashion house through a Luxembourg holding company,

the

Wall Street Journal

reported.

Prosecutors say the Marzottos should have paid taxes in Italy, “where the deal was planned and sealed,” the

Journal

article said. The Marzettos’ lawyers say taxes were properly paid in Luxembourg, where International Capital Group (ICG), the holding company that owned the stake, was based, according to the report.

In November, police confiscated assets valued at 65 million euros, including an 18th-century estate, a luxury Alpine villa, apartments and land. The individuals haven’t been charged with any crime, the report noted.

Matteo Marzotto told the

Journal

that the sale of Valentino Fashion Group (VFG) to private equity firm Permira Ltd. had been communicated to Italy’s stock market regulator and to the media.

Marzotto family members formed ICG in 2006 to house the 29.6% combined stake they owned in VFG. VFG owned the House of Valentino and a stake in German fashion brand Hugo Boss.

Though Matteo Mazzeo denied rumors in 2006 that the family planned to sell VFG, in May 2007 ICG sold its stake in the company to Permira for 738 million euros, the

Journal

article said. Permira later bought out the whole company.

Italian prosecutors “say the 13 people under investigation created ICG for the purpose of evading taxes on proceeds of the transaction because they knew a sale of the fashion group was likely,” the

Journal

article said. The Marzottos deny creating ICG to lower their taxes. (Source:

Wall Street Journal,

Jan. 30, 2013.)