The wheels of justice grind slowly.
Ten years ago, James Packer’s Publishing and Broadcasting Limited (PBL, now Consolidated Media Holdings) sold $1 billion of shares it owned in Crown (then in turn owned by PBL) back to the casino operator in an off-market buyback.
The commissioner of taxation flagged that this netted PBL a tidy capital gain and sent it a bill. PBL appealed to the tax office to reverse its decision. Upon refusal it took the matter to Federal Court in 2011. The Federal Court ruled in the ATO’s favour, but an appeal to the full bench saw what was now Consolidated Media successfully argue the $1 billion buyback was a dividend, which would have allowed it to slash its tax bill.
A High Court appeal, concluded today, ruled with the commissioner (for those interested in the legal wrangling, the judgement is here).
It’s good news for the tax office, and not bad for James Packer either.
After all, he doesn’t own Consolidated Media anymore, having sold it to News Limited this October for $1.94 billion.
A News spokesperson told Business Spectator, another recent acquisition, that they were aware of the issue during due diligence. “The amount concerned is not material and News will pay what we owe.”
News will cough up $4.2 million with $1.1 million in interest – small change for the company, I suppose.