Rank Group, the holding vehicle for New Zealand's richest man Graeme Hart, has lost a tax wrangle over a $14 million Chilean tax bill. Picture / Getty Images
Rank Group, the holding vehicle for New Zealand's richest man Graeme Hart, has lost a tax wrangle over a $14 million Chilean tax bill.
The dispute, over a Chilean subsidiary of packaging giant Alcoa, had taken six years to wind through the United States district court in New York. The
case was finally resolved last week with judge Vernon Broderick ruling Alcoa's former owners were not liable for the tax debt.
Rank acquired Alcoa in a $3.9 billion deal in 2008, and the core of the dispute was a $48m loan by the Chilean subsidiary to its British Virgin Islands parent.
After closing the takeover deal, Rank sought ways and means to restructure the arrangement and centralise the profits. According to the ruling "Rank's goal was to find a way to 'unwind' the loans without triggering a tax."
The terms of the loan were amended by Rank, with the debt substantially increasing in duration and allowing renewal. In 2010 the Chilean tax authorities, the Servicio de Impuestos Internos (SII), investigated this transaction and were unimpressed.
