Denmark: Company Draining

AuthorSysette Vinding Kruse
DOIhttps://doi.org/10.1108/eb025687
Pages107-108
Publication Date01 Feb 1995
Journal of Financial Crime Vol. 3 No. 1 International
Denmark: Company Draining
Sysette Vinding Kruse
A new phrase has been introduced in Denmark in
the field of financial crimes called 'Company
Draining', and the Public Prosecutor of Commer-
cial Crimes is presently investigating 2,000 cases
involving considerable amounts of money (milli-
ards of DKK). The money drained from the
companies is money owed to the fiscal authorities.
The method is as follows. A company closes down
its business and pays its creditors. Left in the com-
pany is a sum of money owed or partly owed to
the fiscal authorities but not payable until a certain
date in the future due to the tax legislation.
For example, Company A owns DKK10m of
which DKK3m is payable to the fiscal authorities.
The value of the company is thus DKK7m, but a
buyer B offers DKK8m and, of course, the com-
pany is sold to B. B disappears with the DKK10m,
and the fiscal authorities in Denmark suffer the
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