Prada owners under investigation for tax avoidance - sources

MILAN Fri Jan 10, 2014 4:08pm GMT

Prada Vice President Carlo Mazzi, an unidentified interpreter, Chief Executive Patrizio Bertelli, Group Controlling Director Armando Tolomelli and Alessandra Cozzani, group investor relations director, (L-R) speak via a live tele-broadcast in Milan during a news conference in Hong Kong June 12, 2011. REUTERS/Tyrone Siu

Prada Vice President Carlo Mazzi, an unidentified interpreter, Chief Executive Patrizio Bertelli, Group Controlling Director Armando Tolomelli and Alessandra Cozzani, group investor relations director, (L-R) speak via a live tele-broadcast in Milan during a news conference in Hong Kong June 12, 2011.

Credit: Reuters/Tyrone Siu

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MILAN (Reuters) - Italian fashion designer Miuccia Prada and her husband, Prada chief executive and fellow shareholder Patrizio Bertelli, are under investigation as part of a tax avoidance probe by Milan prosecutors, three investigative sources told Reuters on Friday.

A spokesman for lawyers representing Prada Holding, through which Miuccia, her siblings and husband control the luxury group centred on a brand founded by her family in 1913, said he was not aware of the investigation.

Milan's public prosecutor's office declined to comment.

Prada Holding said in December it had completed a process of voluntary tax disclosure and planned to bring back to Italy assets held abroad, primarily in low-tax Netherlands - where the holding company was previously based - and Luxembourg.

Prada Holding is the latest in a series of high-profile firms to land in the crosshairs of Italy's tax authorities, which have become more interventionist as economic crisis erodes their revenues.

U.S. tech giant Apple (AAPL.O) came under investigation in Italy in November, and fashion designers Domenico Dolce and Stefano Gabbana were given 20-month suspended prison sentences and a heavy fine in June. All denied any wrongdoing.

Italy's Corriere della Sera newspaper said on Friday Prada and Bertelli had paid 420 million euros ($571 million) to Italy's tax agency to settle their tax affairs. The paper also said the two were under investigation despite the settlement.

The investigative sources said the report in Corriere della Sera was correct and added that a Prada director was also under investigation in the same case.

A source close to the matter said the money paid to Italian tax authorities was a routine transaction and not a fine.

Shares in Prada, which is listed in Hong Kong, closed down 3.9 percent earlier on Friday.

Prada chief financial officer Donatelli Galli said on a conference call in December the company had had "strong and continuing" discussions with Italian authorities and had agreed to pay to avoid further penalties.

Galli said there was no litigation underway at the time.

($1 = 0.7361 euros)

(Additional reporting by Sara Rossi; Writing by Isla Binnie; Editing by Mark Potter)

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