It appears the October 2007 tax fraud investigation of Cisco by Brazilian authorities regarding an alleged evasion of $830 million in taxes is still simmering. According to Cisco's most recent Form 10-Q filed with the U.S. Securities and Exchange Commission:
"Brazilian authorities are investigating the Company’s Brazilian subsidiary and certain of its current and former employees, as well as a Brazilian importer of the Company’s products, and its affiliates and employees, relating to the allegation of evading import taxes and other alleged improper transactions involving the subsidiary and the importer. The Company is conducting a thorough review of the matter. In December 2008, Brazilian authorities asserted claims against the Company for calendar year 2003 and the Company believes claims may also be asserted for calendar year 2004 through calendar year 2007. The Company believes the asserted claims are without merit and intends to defend the claims vigorously. The Company is unable to determine the likelihood of an unfavorable outcome on any potential further claims against it. While the Company believes there is no legal basis for its alleged liability, due to the complexities and uncertainty surrounding the judicial process in Brazil, and the nature of the claims asserting joint liability with the importer, the Company is unable to reasonably estimate a range of loss, if any. In addition, the Company is investigating the allegations regarding improper transactions, the Company has proactively communicated with United States authorities to provide information and report on its findings, and the United States authorities are currently investigating such allegations."
In the filing, Cisco admits Brazilian authorities have asserted claims against it for 2003 and expects further claims for 2004, 2005, 2006 and 2007.
Below, view a document describing the investigation from the Federal Court of Sao Paulo that has been translated from Portuguese:
Unable to reasonably estimate a range of loss sounds rather foreboding to me, what's your take?
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sounds like
Sounds like they are being truthful to stockholders as obligated by law. They think they can win, but understand that there is a chance they might not, so they want to let their stockholders know that might happen. Pretty standard stuff here.
Curious, since Cisco is so transparent
Curious, since Cisco is so transparent, why not disclose the details regarding "asserted claims" made by the Brazilian authorities against Cisco for calendar year 2003?
Also, glad that you consider this "pretty standard stuff."
However, I most certainly disagree!
Sincerely,
Brad Reese
BradReese.Com Cisco Refurbished
Funny Google translation...
The Google translation from Portuguese has a few issues...
"The gang, according to research, using false documents, subfaturamento prices of goods and companies ghosts or oranges, for simulation of trade and concealment of the real importers or exporters."
When does any company
When does any company ever talk about an active legal issue?
They usually don't
Agree, they usually don't, so this "legal issue" must be a potential "Whopper" for Cisco.
No matter how large a "Whopper" it turns out to be, it's comforting to know that Cisco already has the cash with which to eventually pay the "asserted claims" made by Brazilian authorities against Cisco.
Sincerely,
Brad Reese
BradReese.Com Cisco Refurbished
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