By Bob Rafto
Rupert Murdoch and his corporate criminal tax fiddle
A loan arrangement by Newscorp to Foxtel may be lawful under a tax law but it could be illegal under the criminal law.
Newscorp loaned Foxtel $900M with an interest rate of 12%.
A report by Michael West describes Foxtel was spitting cash (highly profitable) at the time of the loan and there was no requirement for the loan.
The interest repayments from Foxtel to News resulted in Foxtel reducing their tax to the ATO to zero, Foxtel generated $6 Billion in revenue over 3 years and paid no tax.
If Foxtel had no requirement for the loan it can be argued that Newscorp, Foxtel and their tax lawyers and accountants conspired to draw up a loan agreement for the sole purpose to defraud the ATO of taxable income.
The criminal code states:
Obtaining a gain
(1) A person commits an offence if:
(a) the person conspires with another person with the intention of dishonestly obtaining a gain from a third person; and
(b) the third person is a Commonwealth entity.
Penalty: Imprisonment for 10 years.
If the loan is only a book entry it cannot be a legal transaction because no transaction has taken place. Foxtel is paying interest on funds they didn’t receive and a false claim is made to the ATO to deduct the interest costs.
(The above paragraph reinforces section 135.4).
I believe there is reasonable and sufficient evidence for the AFP to prosecute News and Foxtel, along with their partner Telstra, but will they?
Another question is: who with authority can lodge a complaint to the AFP?
Or will the AFP roll over like they have with Mal Brough, James Ashby, Helicopter Bishop and now Michaella Cash?