TaxPersonal TaxThe corridors of power

The corridors of power

Anyone who doubts that art and business don't sit well together need only consider the example of Dennis Kozlowski, until recently chairman of Tyco International. Kozlowski has become embroiled in a messy affair involving a Renoir, a Monet and $1m in allegedly unpaid sales tax.

As the Kozlowski affair was breaking, Alfred Taubman, the Detroit shopping mall millionaire, decided he had had enough of the art world and put his controlling stake in Sotheby’s up for sale. Taubman is to begin a one year prison sentence in August.

Corporate Britain has had its fun with boardroom high-rollers and exotic collectables. In 1991, Hanson’s takeover bid for ICI came unstuck after it was discovered that Hanson shareholders were paying for racehorses running in Lord White’s colours.

Hanson had lost £12m on its equine investment.

Greg Hutchings resigned as chief executive of Tomkins in October 2000, amid allegations that company money had paid for apartments and corporate jets. Hutchings’ wife and housekeeper were supposedly on the company payroll.

An investigation by Ernst & Young unearthed not a shred of evidence to support the allegations. It turns out that Tomkins bought – and sub-leased – six jets as part of a tax minimising scheme. Tomkins won various tax allowances and shared in the profits from running the planes.

Art, planes and horses may simply go with the territory. Tiny Rowland enjoyed his perks when running Lonrho as a private fiefdom. Robert Maxwell undoubtedly had a few undeclared Renoirs tucked away in a warehouse – courtesy of the Mirror Group Newspapers’ pension fund.

Peter Clowes used investors’ money to buy a home in Cheshire, a chateau in France, two yachts, a farm in the Peak District, a Porsche, a helicopter and four executive jets.

It makes Kozlowski’s tastes look positively modest.

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