DHL Corporation and Subsidiaries - Page 65

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          was saved by placing corporate entities in low-tax jurisdictions.           
          DHLI/MNV, the foreign entities, grew faster than DHL during the             
          15-year period preceding the 1990 transaction.                              
               Schwartz formed Management Resources International Ltd.                
          (MRI) in Hong Kong on January 27, 1981, largely for tax reasons.            
          William Walden, who was hired by and connected to Hillblom, was             
          placed as head of MRI.  MRI contracted with DHLI, MNV, and DHL to           
          supervise and coordinate the DHL network, including “(i) the                
          development of information and advice, (ii) direction and                   
          implementation of policies relating to marketing, advertising,              
          operations, electronic data processing, accounting, legal issues            
          and insurance, (iii) project research and development, and (iv)             
          strategic planning.”                                                        
               Before 1989, DHL, DHLI, and MNV used MRI to enhance the                
          commercial benefits derived from the DHL network.  The NSC also             
          had oversight of MRI and, in 1989, agreed to its legal                      
          reorganization.  DHL, DHLI, and MNV management reported through             
          their regions to the NSC’s chief executive officer.  By 1988,               
          more than half of MRI’s employees worked in the United States,              
          and they were covered under DHL’s employee benefits package.  DHL           
          and DHLI periodically advanced funds to MRI to enable it to meet            
          its costs.  Bedford Management Group, Inc., held 49 percent of              
          MRI’s stock.  At the behest of the DHL shareholders, Schwartz,              

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