PARIS — Federal prosecutors in Brussels have opened an investigation into the Belgian financial activities of LVMH, the luxury giant controlled by the French mogul Bernard Arnault, who is seeking citizenship in that country.
The investigation, confirmed Friday by a spokeswoman for the Belgian Federal Justice Ministry, could provide a rare look into the affairs of Mr. Arnault, one the world’s wealthiest individuals. Mr. Arnault controls LVMH Moët Hennessy Louis Vuitton and its portfolio of luxury brands, including Dior, through a complicated network of companies that makes it difficult to ascertain the actual ownership structure.
The investigation was first reported Friday by De Morgen, a Flemish newspaper.
Because Mr. Arnault is seeking Belgian citizenship, the justice authorities had been asked to weigh in with an opinion on his fitness. According to De Morgen, the investigation followed from that review, with officials looking into suggestions that LVMH might have used a network of Belgian subsidiaries to avoid taxes.
Geneviève Seressia, the Justice Ministry spokeswoman, said ministry officials had recommended against Mr. Arnault’s application because he had been unable to prove that his principal residence for the past three years had been in Belgium. She declined to comment further on the case.
Mr. Arnault is not the only well-known Frenchman to seek foreign citizenship lately. Last week Gérard Depardieu, the actor and businessman, received a Russian passport from Vladimir V. Putin. Mr. Depardieu has complained that his tax burden in France grew too large under the government of François Hollande, which hopes to set the top marginal income tax rate at 75 percent.
The country’s Immigration Service had already returned a negative reply on Mr. Arnault’s application. The Belgian State Security Service is also expected to render an opinion. But the final decision will be in the hands of a parliamentary naturalization commission, which is not required to abide by the recommendations.
“This is just a step in the procedure that doesn’t at all prejudge the final decision of the Belgian naturalization commission,” Olivier Labesse, a spokesman for Mr. Arnault said, adding that the decision was expected this spring. “Bernard Arnault remains a French citizen,” he said, “and he pays his taxes in France.”
Mr. Arnault, 63, has never explained exactly why he is seeking Belgian citizenship. But having a Belgian passport might allow his heirs to keep LVMH intact on his death, rather than, as might be the case in France, having to break the company up to pay inheritance taxes.
Last year, Mr. Arnault was ranked by Forbes magazine as the world’s fourth-wealthiest person with a fortune estimated at $41 billion, behind Carlos Slim Helú, Bill Gates and Warren E. Buffett.
Article source: http://www.nytimes.com/2013/01/12/business/global/belgium-investigates-lvmh.html?partner=rss&emc=rss