Goodman company owner paid little tax on €52m profit

The Luxembourg company that part-owns Larry Goodman’s ABP Group as well as other investments associated with the Co Louth businessman, paid almost no tax on a profit of €52.6 million in the year to the end of March 2013, according to accounts filed in the tiny EU member state.

The result for the year brought the accumulated profits for the company, Parlesse Investments Sarl, to €278.6 million. The Luxembourg filings for the company, along with those of other key Goodman companies based in the Netherlands, give an unprecedented insight into the scale of the 77-year-old’s business empire.

In the year to March 2012, Parlesse made a profit of €80.15 million but paid only €165,700 in tax. In the 2013 year, it paid tax of €218,101, a rate of 0.4 per cent. The company has no employees.

The Parlesse accounts reflect the type of tax structures which were highlighted last year by the so-called Luxleaks revelations. There is nothing illegal about these structures. The Luxleaks revelations prompted the former prime minister of Luxembourg, Jean Claude Juncker, to say that, while his country's tax practices were legal, they were "not always in line with fiscal fairness" and the Luxembourg regime may have breached "ethical and moral standards".

The accounts for Parlesse show the company had financial assets of €809 million at the end of the 2013 period, mostly being shares in and loans to affiliated undertakings. The company’s income comes from the dividend s and interest it receives on these shares and loans.

Mr Goodman was a managing director of Parlesse up to August 2012. A spokesman for Mr Goodman said he did not wish to comment.

The Luxleaks controversy showed how companies based in Luxembourg used investments in affiliated companies outside the duchy to channel profits to Luxembourg in a way that would make them all but exempt from tax in the tiny EU state.

The Organisation for Economic Co-operation and Development is examining how new rules might stop multinationals shifting profits across borders using interest and dividend payments. According to its website, the ABP group (formerly Anglo Beef Processors) processes approximately one million cattle annually and is the largest processor of beef in Ireland and Britain, and one of the top three in Europe. It has major operations in Ireland, Britain and Poland and supplies many of the continent’s top supermarket chains.

Earlier this year it won a breakthrough export deal in the United States.

The Parlesse accounts for the 2013 year show that a dividend of €24.8 million, €8.9 million of which was in cash and the rest by way of the assignment of loans, was paid to the company’s sole shareholder, Galway Ltd, a company with a registered address in Malta. The accounts state that certain of the assigned loans carry an interest rate of 7 per cent,

The accounts show Parlesse owns 100 per cent of Dutch companies Parma Investments BV and Kanev BV, and Irish unlimited company Tubriz. The net equity of the three companies at the end of 2012 was €457.6 million. The two Dutch companies made profits of slightly more than €35 million each, while the Irish company booked a loss of €1 million.

The Luxembourg company was established in December 2009 and the shares of Parma Investments BV were later transferred to it. The Parlesse accounts for its first year of operations, ending on March 31st, 2010, show it made a profit of €129 million. It had no employees and paid tax of €69,607.

The creditors of Parlesse Investments at the end of the 2010 financial year included: an interest-free loan from Tubriz for €155.6 million; an interest-free loan from Kanev Ltd of €27.9 million; an interest-free loan from Irish Agricultural Development Company for €229.8 million, and a number of other small advances. Irish Agricultural Development Company is an unlimited company with an address in Castlebellingham, Co Louth. Its directors are Larry and Catherine Goodman.

In 2011, Parlesse Investments booked a profit of €17.8 million and paid tax of €350,797. Accounts for that year show Parma Investments BV made a profit in 2010 of €24.3 million, while Kanev made a profit of €32.9 million. Castlebellingham company Tubriz made neither a profit or a loss. In the 2011 accounts Parlesse notes it has a loan from the Rabena Foundation for €660,000. The foundation is based in Liechtenstein and owned Parma Investments for a number of months in 2002, according to filings in the Netherlands.

Parlesse was incorporated in 2009 and its capital was augmented in February 2010 by way of Galway Ltd taking out additional shares, and Parlesse being paid with all of the issued shares in Parma Investments BV.

The Parma Investments BV accounts for the year to the end of March 2013 show that it had investments in subsidiary companies worth €191 million, produced a profit of €28.4 million, and paid no tax.

On tax, a note to the accounts says: “In relation to the year under review, the company anticipates no corporate income taxes payable since the result on associated companies is exempt of tax and therefore the fiscal result will be negative.”

The company’s income came from its share of the results of subsidiaries and associated companies, according to the accounts. The previous year the company made a profit of €35.5 million and also paid no tax.

Notes to the accounts say it bought 45 per cent of the shares in Irish Food Processors, the former name of the Ardee, Co Louth-based ABP Foods, for €125 million in 2002. In 2007 these shares were redeemed and the proceeds used to subscribe for 45 per cent of the shares in Jersey company Glydee Ltd, the 100 per cent shareholder in Irish Food Processors (now ABP Food Group Unlimited, Jersey).

Parma has interests in companies associated with the Hermitage private hospital, the Blackrock Clinic and the Setanta Centre, all in Dublin.

Luxembourg: the Goodman link

Silverbirch Investments, a Luxembourg company that forms part of the international Goodman corporate group, made a €2.48 million profit in the year to March 2012, and paid tax of €16,382.

The company was formerly called Parma Investments SA and was the owner of the major Goodman entity, Dutch company Parma Investments BV, from 2002 to 2010.

In its 2011 year, Parma Investments SA reported a profit of €7 million and paid tax of just €40,879.

According to its 2010 accounts, the Luxembourg company had creditors totalling €120.8 million which, notes to the accounts said, “consist mainly of loans granted by Rabena Foundation and the related accrued interest.” Rabena Foundation is based in Liechtenstein.

Silverbirch Investments SA and Parlisse Investments Sarl have addresses at the offices of the Intertrust financial service company in Luxembourg. Parma Investments BV has its address at the Intertrust offices in Amsterdam.

Profile: Beef tribunal’s sittings focused mainly on Goodman group

Larry Goodman is one of Ireland’s wealthiest businessmen who built up a beef-processing empire only to see it collapse, before building it up again.

The 77-year-old Louth man left school early to go into the family meat business. By 1990, the business he had built up was of such a scale that it was responsible for a few per cent of Ireland’s gross national product.

Goodman was selling huge amounts of beef to Saddam Hussein’s Iraq when the former dictator launched an invasion of Kuwait and the Co Louth businessman found that the massive amounts of credit he had granted to the country looked set to destroy him.

Such was the perceived importance to the Irish economy of Goodman, that the Dáil was recalled from its holidays and special legislation passed providing protection to the business.

Through the 1990s, Goodman fought to regain control of his empire and, by the end of the decade, he had re-assumed full control.

However, controversy about alleged fraud in the beef industry led to the establishment of the beef tribunal, the report from which led to the collapsed of the government of Albert Reynolds in 1994.

The tribunal’s sittings were focused mainly on the Goodman group.

While the tribunal’s 1994 report made damaging findings about the Goodman business, it did not find that it had been proven that Goodman knew about them.

The group’s sales to Iraq cost the State dearly under the export credit insurance scheme, and the group’s collapse cost banks dearly as they had to write off substantial debts.

Since regaining full control of his business, Goodman has gone on to build it into a multibillion euro turnover enterprise, supplying product to major retailers here and in the UK, as well as across Europe.

Goodman’s ABP Group has its headquarters in Ardee, Co Louth, and major operations in Ireland, Britain and Poland. Over recent times Goodman has also been noted for his investments in private hospital and property here, including the former Bank of Ireland headquarters.

In 2013, the ABP Silvercrest plant in Ballybay, Co Monaghan, was at the centre of the horsemeat scandal that hit the European meat industry. Horsemeat was found in burgers that were produced at the plant using meat reportedly supplied from Poland. Tesco announced it would not longer be buying burgers for Silvercrest, while ABP said it had never knowingly used horsemeat. Later that year, ABP sold the plant to the Keepak Group.

Goodman is executive chairman of ABP, it has a turnover of approximately €2.5 billion a year, and employs 8,000 people, 2,500 of them in the Republic. His sons, Laurence and Mark, work alongside him.

Luxembourg: the Goodman link

Silverbirch Investments, a Luxembourg company that forms part of the international Goodman corporate group, made a €2.48 million profit in the year to March 2012, and paid tax of €16,382.

The company was formerly called Parma Investments SA and was the owner of the major Goodman entity, Dutch company Parma Investments BV, from 2002 to 2010.

In its 2011 year, Parma Investments SA reported a profit of €7 million and paid tax of just €40,879.

According to its 2010 accounts, the Luxembourg company had creditors totalling €120.8 million which, notes to the accounts said, “consist mainly of loans granted by Rabena Foundation and the related accrued interest.” Rabena Foundation is based in Liechtenstein.

Silverbirch Investments SA and Parlisse Investments Sarl have addresses at the offices of the Intertrust financial service company in Luxembourg. Parma Investments BV has its address at the Intertrust offices in Amsterdam.