A 12 month investigation of Sony Australia by the Australian Taxation Office has resulted in the Company being hit $21M in penalties and $32M in back taxes, shortly after the assesment was delivered the Chief Financial Officer of the Company quit along with the CEO.
The ATO investigation covered tax returns for the years 2005,2006,2007,2008 and 2010, ChannelNews understands that two other major consumer electronics Companies are currently being investigated.
Sony is believed to have already paid $26.8M back to the ATO while disputing the total amount.
At March 2013 Sony Australia reported a before tax profit of $12.5 million which was double their 2012 profit of $6 million.
Sales at the Australian subsidiary fell $153M from $666M in 2012 to $513M in 2013.
A major contributor to the 22% decline was falling TV and PC sales.
During the past Sony Australia has several senior executives quite the struggling Japanese Company they include CEO Carl Rose as well as Nicolas Barendson, Sony’s Head of Consumer Marketing, who quit after just 11 months in the job. Sony New Zealand managing director, Martin McManus, is reported to be Barendson’s replacement.
Nicholas Foster the former CEO at Sony Australia has also quit the Company
Documents lodged with the Australian Companies and Securities Commission reveal that Sony Australia paid a fully franked dividend of $119M on the 29th of May 2012.
Sony Corporate Affairs as at this stage not responded to ChannelNews requests for information.
Unlike most other consumer electronics brands Sony Australia has kept their senior executives away from being questioned about their performance in Australia.
Last week ChannelNews was asked to supply questions by email, we rejected this sanitised process.
Sony’s chief executive Kazuo Hirai recently announced a higher than expected first-quarter operating profit.
Earnings were boosted by strong demand for its Xperia smartphones and improved TV sales.
Sony shares rose as much as 4 percent in Friday’s Tokyo session – but industry watchers remain unconvinced about its profit turnaround.
Sony made a net profit of $35 million in the April-to-June quarter, compared to a 2.46 billion yen loss in the year ago period. The firm attributed the gains to a weaker yen, which has declined around 15 percent against the dollar this year, and a rise in smartphone sales at home.
But the maker of PlayStation consoles and Bravia TVs acknowledged the harsh market conditions for consumer electronics, cutting full-year sales targets for products from PCs to televisions to video cameras, and left its full-year profit forecasts unchanged even as it lifted its revenue forecast more than 5 percent.
Paul-Jon McNealy, CEO and founder of Digital World Research, said Sony’s profit is a “one-off” and masks the tech giant’s fundamental flaw, which is that its vast electronics business remains weak.
More to follow.
