Hong Kong: The Italian judicial authority is investigating past individual tax filings of Prada SpA’s chief executive officers (CEOs), making the two fashion executives the latest target of a government probe in the country.
Miuccia Prada and Patrizio Bertelli were informed of the examination by the authority “regarding the accuracy of certain past tax filings by them as individuals in respect of foreign-owned companies", Milan-based Prada said in a statement to the Hong Kong Stock Exchange on Monday.
“The company confirms that neither the company nor any of its subsidiaries was or is involved in this matter," chairman Carlo Mazzi said in the statement.
The probe isn’t the first into the tax affairs of luxury-goods executives by Italian authorities. In March 2013, police seized more than €46 million (over ₹ 350 crore) of assets from executives linked to jeweler Bulgari for alleged tax evasion. This year, Domenico Dolce and Stefano Gabbana, the founding designers of the Italian fashion company that bears their name, were sentenced to 18 months in prison for non-payment of €40 million of taxes at one of the designers’ companies, a charge they deny.
Prada fell 0.9% to HK$47.85 at 3.53pm in Hong Kong trading on Monday, amid a broader slump in the city’s shares as democracy protests led the benchmark Hang Seng Index to drop as much as 2.5%. Other Hong Kong-listed luxury retailers also fell, including Luk Fook Holdings International Ltd, which plunged 4.6% and Chow Tai Fook Jewellery Group Ltd which was down 4.5%.
Prada said a previous voluntary disclosure by the CEOs had led to an agreement that “completely satisfied the claims of the Italian tax authority," according to the statement. Three calls made to Prada’s Hong Kong-based head of regional investor relations Cynthia Cheng weren’t answered.
The handbag maker reported a 21% decline in first-half net income earlier this month as demand in Asia and Europe remained weak, joining LVMH Moet Hennessy Louis Vuitton SA and Gucci-owner Kering SA, who both reported declines in first-half earnings. Bloomberg