Mauritius Embroiled in French Tax Evasion Scandal with Major Group

France is grappling with a substantial scandal as the prominent construction entity, Fayat Group, faces suspicions of orchestrating an intricate financial manoeuvre to evade French taxes.

This scandal centres on two of Fayat’s subsidiaries, allegedly engaged in a complex and illicit fiscal arrangement involving Mauritius, in a bid to minimise tax obligations within France.

The French National Financial Prosecutor’s Office (PNF) has initiated an investigation into this matter, culminating in searches at the premises of the Fayat Group.

The controversy was ignited by revelations from Mediapart, an independent news outlet, in January 2022.

According to these revelations, Fayat Group allegedly devised a mechanism to curtail tax payments.

The company, which was established in Bordeaux in 1957 and has evolved into a significant machinery manufacturer and the fourth-largest construction entity in France, with a turnover of €5.3 billion and a workforce of 23,000, allegedly employed this strategy.

Recent developments include a report from AFP stating that two targeted Fayat subsidiaries underwent searches due to a preliminary investigation into tax evasion.

Razel-Bec and FCAI, subsidiaries operating within construction and procurement sectors respectively, were searched on July 4, 2023.

The investigation, which was initiated on February 3, 2022, is centred around suspicions of aggravated money laundering of tax fraud. These subsidiaries are suspected of involvement in an illegal fiscal scheme tied to Mauritius.

The alleged arrangement entails the artificial transfer of a portion of profits from equipment purchases for African construction projects to the Mauritian company, Trade and Technical Services Limited (TTS). TTS, however, is alleged to be a shell company.

While the investigation unfolds, concerns surrounding this complex tax evasion scheme continue to reverberate across France and Mauritius.

Source: Defi Media