Telecom Italia faces a €727 million hit to cover subsidiary TI Sparkle’s alleged role in a money laundering scheme.
The charge was revealed in a Telecom Italia shareholder meeting this week, and covers back-dated tax payments and fines relating to the Sparkle case, which forced the firm to twice delay issuing 2009 results Interactive Investor reports, citing Reuters.
Additional corporate tax charges of up to €429 million are possible for the period 2005-2007, and the firm could be fined between 100 and 200% of the tax figure for unauthorised deductions, the website said.
Telecom Italia could have mistakenly deducted up to €298 million in taxes
The firm has already set aside €507 million to cover costs associated with the Sparkle case, and management said the €727 million figure was a worst case scenario.
Fastweb, Sparkle’s alleged co-conspirator in the money laundering fraud, yesterday said the investigation had no impact on its first quarter results, when it reported a 70% rise in net profit year-on-year, according to the Wall Street Journal.