The buyer, Italy’s biggest telephone company, now has a total market value less than what it paid Bain and other investors for the directory business..
based on a report in Bloomberg: By Jesse Drucker, Elisa Martinuzzi and Lorenzo Totaro – Aug 6, 2012
Another Romney/Bain Taxes scandal may be brewing. In Italy, Bain, under Romney, engineered a deal that cost the Italian Telephone Companies Millions of Euroes, while earning Romney at least $50,000,000. The deal has led to three books, separate legal and regulatory probes and newspaper columns alleging investors made a fortune at the expense of Italian taxpayers.
Here is the deal: Bain Capital, under Romney as chief executive officer, bought a telephone-directory company from the Italian government and then sold it about two years later, at the peak of the technology bubble, for about 25 times what it paid. Romney’s firm, along with other “investors” funneled profits through subsidiaries in Luxembourg, where tax laws are friendly and investors get to avoid income taxes in other European countries.
The sale of the government’s directory business is “a dark chapter in the country’s privatization history, one that has hurt Italians deeply,” said Bernardo Bortolotti, an economics professor at Turin University who advised the Italian Treasury on asset sales from 2002 through 2005. “It was a mistake from the start, damaged by a lack of transparency and the use of offshore funds.”