Vivendi Hits Out At 'New' Tax Liability Claims

by Mike Godfrey, for LawAndTax-News.com, Washington

10 April 2003

In a statement released last week, French-American media company, Vivendi condemned press reports regarding its potential $2.7 billion tax liability, arguing that the liability has been public knowledge for several years, and that additional publicity about it in the absence of any new information could be injurious to the company's reputation.

Reports in the international media last week drew attention to an IRS statement recently filed with the US Securities and Exchange Commission which claims that Seagram Co., acquired by Vivendi in 2000, acted improperly when it reported taxes due on the sale of 156 million shares to chemical company, Dupont in 1995.

'Vivendi Universal's position is that the tax treatment is fully compliant with US tax laws in force at the time,' the company explained, continuing: 'While the outcome of any controversy cannot be predicted with complete certainty, Vivendi Universal believes that this dispute with the IRS will be resolved so as not to have a material adverse effect on its financial statements as a whole.'

Revealing in the statement that it has put aside sufficient funds to cover the possible tax bill, Vivendi concluded by observing that it: 'deplores the fact that the press draws attention unnecessarily to information that has been public knowledge for many years, and which has brought no new element to light and might cause major harm to the company.

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