Compliance & Regulation

TPG disputes ATO tax claim

The Australian Taxation Office has sought to freeze TPG's accounts in Australia, alleging the private equity firm owes $423m in taxes on the proceeds of its Myer exit.

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TPG Capital has disputed claims from the Australian Taxation Office (ATO) that it owes A$452.2 million ($422.7 million; €282.3 million) in unpaid capital gains taxes from the recent public listing of portfolio company Myer Group.

TPG said in a statement it has at all times complied with Australian taxation laws and would continue to do so in the future. The firm said it had not been contacted by the ATO, but that it intends “to cooperate fully with any inquiry they make as we have done so in the past”.
 
Last week, the ATO attempted to freeze TPG’s Australian accounts over the matter. The ATO has also attempted to slap the firm with an A$226.1 additional penalty, or 50 percent of the assessment, for allegedly avoiding tax, The Australian newspaper reported. 

TPG led a consortium including Newbridge Capital (which TPG later subsumed) to acquire the Myer retail business for $A1.4 billion in 2006. Myer raised A$2.2 billion through its IPO in October, which saw a complete exit for its private equity owners, TPG and Blum Capital. It is estimated TPG received A$1.3 billion when it sold its stake in the Myer float, having recouped all of its initial investment prior to the flotation.

Myer shares, which were sold at A$4.10 in the offfering, were trading at A$3.92 at press time. 

TPG has had a tough time in Australia: In 2008, Australia’s largest railway and port operator has decided to not allow TPG and Global Infrastructure Partners to conduct due diligence needed to finalise a bid, saying that their initial  A$2.9 billion offer undervalued the business.
In 2007,TPG pulled out of a high profile bid for Australain airline Qantas. TPG was part of a Macquarie-led consortium, Airline Partners Australia, that decided not to make a renewed offer for Australian airline Qantas, after failing to secure the 50 percent shareholder acceptance it needed for its A$11.1billion bid.