Luxembourg: When secrecy backfires

(via Wort.lu) “The bankruptcies of nearly 20 shops in Luxembourg City rocked the capital last week, but a complex network of companies and holdings is only beginning to be uncovered.

Neither the administrator, labour unions or employees of the shops were able to determine immediately how many stores were affected by the bankruptcies announced last week.

The reason: Entrepreneur duo Pascal Einhorn and Frédéric Castera founded more than a dozen companies over the years under such names as Geschwester sàrl, Goldesch sàrl, Oro sàrl, Pikbaam sàrl or Kannerspill sàrl, each managing one shop.

It has also been learned that Castera and Einhorn failed to pay social contributions worth several hundreds of thousands of euros for their employees, as well as owing their staff wages and benefit payments.”

Luxembourg’s Minister for the Middle Classes Françoise Hetto-Gaasch commented that “the government’s scope of action in regards to the bankruptcies of a series of shops in Luxembourg City is limited.”

“At the meeting of a parliamentary commission on Thursday, the minister said that only law reform would enable the state to better track companies building up debt with the state, for example in the shape of outstanding tax or VAT payments.

Currently, due to tax secrecy, even the state only has limited access to information on outstanding payments.”

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