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2 TEXTS ON SUBSIDIARIES

March 4, 2017

QUOTE 1: The legislation opened up the possibility of gross economic exploitation of the so called subsidiary model, that seemingly was accepted by politicians and the decisive parts of the administration. In principle the design of this model is functioning in a very simple way.

A shipyard with building plans, difficulties in surviving and with the prospect of declining sale, established a subsidiary and made a contract with this subsidiary about selling the planned new building.

In other words the producer, the seller and the buyer was in reality, but not formally identical.
For this reason the contract price for the planned new building could be established in an agreement that in advance offered the greatest possible public financial support in the form of cheap loans.

The contract price was namely the foundation of the loans from Danish Ship Finance, that is tax money, that financed the building of the ship.

On the paper a shipyard and its subsidiary could randomly set the cost of a new building to for example a 100 million DKK even though the actual construction costs amounted to only 80 million DKK.

This over-indebtedness allowed the shipyard and its subsidiary to finance the new building for themselves without inserting a penny of their own money. The taxpayers paid.

At the same time employment at the yard could be maintained. Later, the yard and its subsidiary could sell the ship to a company (wholly or partially) to the market price, that was unaffected by the artificial over-indebtedness, that is at a much lower price.
Or be in charge of the operations eventually together with others – with deficit.

It was this subsidiary model with over-indebtedness – here in its purest form – B&W and other Danish yards and shipping companies exploited in the years from 1986 to 1993.

A financial ”self-service-table” with taxpayers’s money, as it has been described. It happened with the silent acceptance of alternating ministers, politicians, administration and organizations. END OF QUOTE

SOURCE: ”Ole Lange, Juvelen der blev til skrot Kampen om B&W 1945-1996” pages 319-320 (Ole Lange, The Jewel that turned into scrap. The Fighting to dominate B&W 1945-1996 pages 319-320).

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QUOTE 2: In fairness it must be stated, that the world has become more complex. In some situations, the competent journalists who fortunately exist, just like the police will have to be cooperating internationally in order to uncover cross-border transactions and crime.
They have formed a union, ICIJ [International Consortium of Investigative Journalists], as we saw recently with The Panama Papers, what is fine. But you have to be careful, that it does not evolve into a bunch of wolves.
When 107 media in 80 countries strikes at the same time with sensitive personal revelations usually blood will be flowing and heads rolling.
The use of leaked documents and emptied filing cabinets is a topic to be discussed and I don’t think we have seen the last of this case.
It would be strange, if a cloud of lawsuits is not going to be following from people who have had completely legitimate subsidiaries and paid their taxes. Therefore, it is a form of journalism that requires much research and care. END OF QUOTE

SOURCE: Kirsten Jacobsen, Panser Generalen Nedslag i Jørgen Ejbøls liv og karriere side 48. (Kirsten Jacobsen, XIXth (google translate) Impacts in Jørgen Ejbøl’s life and career page 48.)

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