Germany's GfK hit by tax fraud scandal in Turkey
FRANKFURT Jan 29 (Reuters) - German market research group GfK has uncovered clues that may point to tax fraud in its operations in Turkey and estimates damages could amount to 21 million euros ($28.3 million).
"GfK has discovered incidents of suspected tax evasion in its Turkish subsidiary. Initial findings indicate that former local management in Turkey collaborated to defraud GfK through tax and social security avoidance schemes over several years," the company said late on Tuesday.
"GfK has voluntarily self-reported this matter to the authorities in Turkey for the period in question," it added.
The company pledged to work with local authorities in Turkey and will explore potential criminal and civil charges against the former Turkish management team and other responsible persons.
GfK said it would book a one-off provision of 21 million euros in its 2012 accounts to cover potential historic tax and social security financial obligations at its the Turkish subsidiary, GfK Arastirma Hizmetleri.
"The adjusted operating income will not be affected and is in line with expectations," the company added. ($1 = 0.7420 euros) (Reporting By Christiaan Hetzner; editing by Andrew Hay)