Shire to face the spotlight on its tax strategy
Company is being targeted by ShareAction
Shire’s Adderall XR. The company, which has about 50 Irish staff, is now on a list of big firms being targeted for further scrutiny by ShareAction, a UK campaigning group that opposes aggressive corporate tax planning, and Christian Aid, an Irish charity.
Shire, the UK-based pharmaceuticals giant that is domiciled in Ireland for tax reasons, holds its annual general meeting in Dublin today.
The directors are likely face a few awkward questions from activists and disgruntled shareholders over the company’s use of Ireland in its tax minimisation strategy.
Shire, which manufactures neurological medicines, may not be a fashionable company. But it is a trend-setter among tax-avoiding multinational drug giants.
The strategy of opening or acquiring an Irish holding company, before relocating the HQ to Dublin to avail of lower tax rates, is now de rigeur among the multinational pharma sector. Shire pioneered the strategy back in early 2008, stunning UK authorities at the time with the audacity of the move. It opened the door that the likes of Covidien later walked through.
The company, which has about 50 Irish staff, is now on a list of big firms being targeted for further scrutiny by ShareAction, a UK campaigning group that opposes aggressive corporate tax planning, and Christian Aid, an Irish charity.
The two groups will be represented at today’s meeting by Sorley McCaughey, the head of policy at Christian Aid, who will quiz Shire’s directors on its tax strategy. He will ask whether the directors have considered the reputational risk to Shire of its tax arrangements, and also about the oversight of the tax strategy by its audit committee.
This is not the AGM of Bank of Ireland or AIB. There will be no egg throwing or angry remonstrating from the floor. It will, we are told, be a “non aggressive”, polite engagement by the activists who are looking only for a “new engagement” on the issue with industry.
Nor will Shire be the only AGM the two groups attend to voice their tax concerns.
But its directors could probably do without the spotlight being shone on the issue of Shire’s tax avoidance.
Likewise Ireland, still making international headlines the corporate tax avoider’s European HQ of choice.