Waste group hit by £35m claim

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The Independent Online
The Swedish tax authorities are claiming £35m from Waste Management International, which is controlled by the giant WMX Technologies group in the US.

The claim relates to the purchase six years ago of Sellbergs, a deal that marked the environmental services company's drive into the Swedish market.

Waste Management was reluctant to discuss the case yesterday. A spokeswoman said only that the Swedish claim included penalties and interest on an income tax liability from the payment of a dividend the year after Sellbergs was bought.

She said the Swedish investigation had started "extremely recently, and we don't know why they have decided to look at it now". She added: "We feel that the proper paperwork and filings were done at the time. We don't want to make any further comment because it would prejudice the case".

The company said it has been advised by counsel that it had meritorious defences to the claim and "intends to vigorously appeal" the assessment.

Waste declined to say to whom the dividend was paid. The Swedish authorities say the claim is an income tax liability, which suggests the payment was made to the vendors of Sellbergs. The price of the acquisition, which was made before Waste obtained a listing on the London stock market, has never been disclosed.

Yesterday's announcement further depressed the company's share price, which has been hit by disappointing results. A fall of 7p to 257p left the price hovering close to the 1994-95 low of 241p and considerably adrift of the high of 633p hit last September.

The tax claim is equal to 21 per cent of last year's pre-tax profits of £165.2m, which were up from the £150.9m made in 1993.