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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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