Unilever Faces Shareholder Revolt Amid Dutch Tax Scandal

Guido has previously reported on how Unilever’s fanatical Remainer boss Paul Polman is threatening to drop the company’s London listing. Polman’s plan has been described by City figures as a “nasty campaign” motivated by his opposition to Brexit. There is another reason. A major scandal is brewing in Holland, where the Dutch government has abolished its dividend tax as part of its efforts to lure Unilever over. Polman and Mark Rutte are facing accusations they cooked up a sweetheart tax deal which the Dutch government then attempted to cover up, at huge cost to the Dutch treasury. It has since been forced to admit its private memos on the arrangement made “politically sensitive” references to “another country”, i.e. on Brexit. Unilever shareholders were already unhappy with Polman’s attempts to switch to an exclusive Dutch listing. Jeremy Warner explains why they are going to lose out:

Stripped of its UK domicile, Unilever will no longer be eligible for inclusion in FTSE indices, meaning that investors who track those indices might be forced to sell at possibly disadvantageous prices. To proceed, Unilever needs the approval of 75pc of its plc shareholders. Index holders, some of whom have already spoken out against the plan, own around a fifth of the capital, so it’s by no means in the bag, even with the help of a sneaky little $6bn (£4.3bn) buyback, announced last week. Unilever has a fight on its hands… If I were Paul Polman, Unilever’s Brexit-hating chief executive, I’d be worried. There’s a high chance of his swansong going up in smoke.

The two reasons why Unilever wants to move to Holland are the abolition of the dividend tax – so much for the level playing field – and protective rules which will make takeovers (like the Kraft attempt last year) much harder. Which means Rutte, in his regular pops at Britain over Brexit, has been criticising the UK for not accepting the freedoms of single market but attracting companies to Holland by restricting flow of capital. Will Unilever’s shareholders succeed in stopping the move?



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