MotoGP bosses hit with multi-million euro fine
MotoGP bosses Dorna, as well as CEO Carmelo Ezpeleta and CFO Enrique Aldama personally, have been hit with multi-million euro fines by the Spanish Supreme Court, after a ruling on stock sales dating back to 2003.
The court found that the company has simulated the sale of shares in order to avoid paying income tax, after shares of the company were sold to another holding company also owned by, among others, Ezpeleta and Aldama.
Dorna argued in court that the move was a leveraged recapitalisation, a standard business move where a company takes on debt in order to pay share dividends, but the court rejected the argument, instead deciding that the move was an attempt to hide dividend payments.
The court has actually reduced the fines handed down by a lower court, ruling that the move was less serious due to the lack of efforts to hide it – but with the fines running into eight figures, it will still see the parties paying back a substantial amount.
Dorna itself was initially fined €17.2 million (£13.4 million), which has been reduced, while Ezpeleta and Aldama will now pay €3.9 million (£3 million) and €2.7 million (£2.1 million) respectively.
However, in a statement released after the decision, Dorna have said that they intend to further fight the charges, although through what route it remains to be seen.
“Despite holding the Decisions of the Courts in the highest regard, Dorna would like to express its disagreement with the content of the Decision of the Supreme Court regarding the classing of the “leverage recapitalization” transactions performed in 2003 and 2004, from the tax law perspective, as simulations.
“Transactions of this kind are commonplace in the economies of neighbouring countries and are perfectly valid from the corporate law perspective.
“The fact that they are not to be classed as simulations is acknowledged by several Supreme Court justices, who have made known expressly their disagreement with the content of the judgements by expressing dissenting opinions.
“Dorna is analysing the possible ways in which these judgements might be contested.”