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FINANCIAL CHRONICLE™ » DAILY CHRONICLE™ »  IFS involved in Rs.9bn tax scam

IFS involved in Rs.9bn tax scam

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1 IFS involved in Rs.9bn tax scam Empty IFS involved in Rs.9bn tax scam Sun Jun 30, 2013 9:04 pm

Jake Sully

Jake Sully
Manager - Equity Analytics
Manager - Equity Analytics
Recent investigations have brought to light startling revelations of the multi-million dollar Swedish software company - Industrial and Financial Systems’ (IFS) Colombo office being involved in an elaborate tax evasion scam to the tune of millions of dollars, Haveeru Online, a news website based in Maldives reported last week. The report has quoted a ‘chief investigations officer’ from a ‘private investigations body’, whose names it has surprisingly undisclosed.
The report says, “A private investigations body which has unearthed such details against the company registered as IFS Sri Lanka, has exposed how the Swedish software giant had defrauded the Sri Lankan government by evading the payment of taxes for nearly US$70 million (approximately Rs.8.8 billion) for 15 years of its operations in Sri Lanka.”
The report adds that the investigations body, which is conducting a probe into unethical business practices by foreign companies operating in Sri Lanka, revealed that IFS Sri Lanka had manipulated the financial statements and the accounting books for several years by duping the Inland Revenue Department by showing continuous losses.
“The probe has also shed light to the involvement of reputed financial auditing firm - PricewaterhouseCoopers (PwC) which has been annually conducting the independent audit. The findings have revealed that PwC has been ignoring the blatant financial discrepancies that had been indicated in the IFS records. The findings have also disclosed details of IFS Sri Lanka, which is a subsidiary of the IFS Group in Sweden being involved in illegally repatriating money out of the country. The investigators have learnt that some of the money received and sent out of the country has not been accounted for with most of the money being used for several projects that are currently being conducted using proxies. It is learnt that some of these proxies are companies that have been recently registered by current high-ranking officials of IFS Sri Lanka,” an extract from the story posted on its website stated.
When The Nation contacted IFS Sri Lanka for a comment on the veracity of the claim, it’s Marketing Executive Shaloma John whilst totally refuting the report as false said, “We have passed Haveeru’s article on to the senior officials in the management at both IFS and PwC and a specific response on what action we will pursue will be forthcoming once we study it fully,” she said. (AR)


- See more at: http://www.nation.lk/edition/news-online/item/18900-ifs-involved-in-rs9bn-tax-scam-report.html#sthash.IQhob1Hg.dpuf

2 IFS involved in Rs.9bn tax scam Empty Re: IFS involved in Rs.9bn tax scam Sun Jun 30, 2013 9:28 pm

Arena


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
We used to call International Fraudulent system for IFS when we were working with them in the first phase of ERP implementation for a reputed comapny in Sri lanka. But that is because they didnt give what they promised in first meetings and still the system does not work in the expected way.

It is a good system but there were no talented employees from their end to make it a proper ERP. Any way all the best IFS. If this is true god bless.....................u..

3 IFS involved in Rs.9bn tax scam Empty Re: IFS involved in Rs.9bn tax scam Sun Jun 30, 2013 10:25 pm

Jake Sully

Jake Sully
Manager - Equity Analytics
Manager - Equity Analytics
I remember that my colleague used to do the audit those days and he was telling me that the SL branch was treated as a cost centre. The revenue was recognized somewhere else. Mainly salaries and admin expenses were recognized in Colombo books and invoicing done by another branch.

4 IFS involved in Rs.9bn tax scam Empty Re: IFS involved in Rs.9bn tax scam Tue Jul 02, 2013 12:16 pm

piyalpy


Manager - Equity Analytics
Manager - Equity Analytics
IFS Sri Lanka is a BOI company and enjoys tax concessions offered by the government. Further software exports are tax exempted irrespective of whether the entity has BOI status. And also IFS R&D Sri lanka is a cost center. Can't think about the validity of this news story. I feel this news item as third-class fabricated story.

5 IFS involved in Rs.9bn tax scam Empty Re: IFS involved in Rs.9bn tax scam Tue Jul 02, 2013 1:06 pm

Jake Sully

Jake Sully
Manager - Equity Analytics
Manager - Equity Analytics
Let me continue for argument sake.
It is a cost centre, all the cost incurred in SL is recovered from the head office. So theoritically the profit is zero. Don't you thing there is some problem in revenue recognition when the stand alone company is concerned. And its tax implications.

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