Authorities quantify Nova Austral employees alleged tax fraud at $77 million

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USD 9 million in benefits has been retained as a precautionary measure. 

In a criminal complaint, a Chilean state attorney (CDE) has estimated that the economic damage caused by the alleged fraudulent actions of Nova Austral came in at USD 77 million.

Located on the far southern tip of Chile Nova Austral is half owned by private equity firm Bain Capital. It recently revealed in its latest Q2 report a new criminal case against five individuals (including former managers and executives of the company) is ongoing, related to last year’s allegations of data rigging.

The case claims that Nova Austral claimed for bonuses between 2016 and 2019 that amounted to USD 77 million without complying with legal requirements. This case is one more of many legal actions that have been filed since July.

After the publication of this article, on the 9th of June, a Nova Austral spokesperson told SalmonBusiness: “The information it was appointed in the complaint as a context of benefits received, not as a charge. It is important to clarify that there is not an accusation against Nova Austral for a fraud of US$ 77 million, and any hearing for bring charges (“audiencia de formalización”) has been requested by the Public Prosecutor against the company nor individuals until now”.

On 22 May, the CDE ordered as a precautionary measure that up to four payments of the benefits of the Navarino Law, amounting to around USD 9 million, be retained.

The CDE the asked to extend the criminal complaint now against the company, with the follow argument: “As we have mentioned, Nova Austral -as a beneficiary company- has the obligation to limit its establishment and activity to a rational use of natural resources, ensuring the preservation of nature and the environment, and, in this sense could be potentially liable for the crime of contamination of water provided in Article 136 of the Fishery Law.”

The focus of this surrounds the Navarino Law, a law exempts companies from from income tax.

A Nova Austral spokesperson told SalmonBusiness that it has already filled an appeal: “This precautionary in no case suspends the quality of beneficiary of the Navarino Law that the company has. Only the payment of the last four months of 2019 was withheld, and we are confident that we will reverse that precautionary measure in the Court of Appeals as soon as possible”.

The case can only prosecuted against individuals, not legal entities, a legal representative working with Nova Austral said. The company denies wrongdoing and no arrests have been made.