Swatch Group denied yesterday that it had broken any laws as it investigated allegations by two former employees that the world's biggest watchmaker had evaded taxes with complex pricing methods.
A senior Swatch executive said the company did not expect any impact on its finances from the investigation, which it launched after two former financial controllers filed complaints of discrimination in the United States.
"The investigation has not yet brought anything to light which could be against the law," chief executive Mr Nick Hayek told Swiss television from the Athens Olympics, where Swatch launched its high-profile role as official timekeeper.
Investors, made jittery by recent accounting mishaps at Swiss staffing firm Adecco, sent Swatch bearer shares down as much as 11 per cent on the news. The stock recovered to close down 3.6 per cent at 141.50 Swiss francs.
Analysts said the sell-off appeared overdone since, even if the allegations proved founded, Swatch faced at worst a charge for tax arrears and a slightly higher tax rate in the future.
Swatch, which owns 17 watch brands including Omega and Tissot, has net cash of over SFr1 billion and generates net profits of around SFr500 million, giving it an ample cushion against any potential one-off costs, analysts said.
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