- 59 -
subsidiaries when sold are as follows: $35,000,000 for FC-
Belgium, $2,168,245 for FC-Switzerland, $4,100,000 for FC-Spain,
and $11,668,757 for FC-Italy. The value of FC-Belgium and FC-
Switzerland ($37,168,245) is 70 percent of the total value of the
four subsidiaries ($52,937,002). Seventy percent of $1,639,294
is $1,147,506. We conclude that Burndy-US transferred excess
value in the amount of $1,147,506 to FCI in 1993 through the use
of inflated exchange rates.
c. FCI’s Purchase of Yen With French Francs on July 30 and
August 2, 1993
FCI paid FF300,356,423 on July 30 and August 2, 1993, to buy
yen to pay Furukawa and Sumitomo for 40 percent of the Burndy-
Japan stock. Respondent contends that FCI paid $387,76726 too
much for those yen and required Burndy-US to pay that excessive
26 Respondent calculates this amount as follows. On July
30, 1993, FCI bought �2,620,728,213 for FF150,000,000 at a
conversion rate of �.05723 to FF1. The published exchange rate
on that day was �.056700 to FF1. �2,620,728,213 equaled
FF148,595,289 using the published rate. FCI paid FF1,404,711
(FF150,000,000 less FF148,595,289) more than the published rate
when it bought �2,620,728,213 on July 30, 1993. FF1,404,711 is
$235,571 according to the published exchange rate of FF5.9630 to
$1 on July 30, 1993. Respondent contends that FCI received a
$152,196 constructive dividend due to the Aug. 2, 1993, exchange
rate difference. On Aug. 2, 1993, FCI bought �2,589,271,787 for
FF150,356,423 at a conversion rate of �.058069 to FF1. On that
day the published exchange rate was .057715 yen to FF1. Thus, on
Aug. 2, 1993, �2,589,271,787 equaled FF149,439,822 based on that
exchange rate. FCI paid FF916,601 (FF150,356,423 less
FF149,439,822) more than the published exchange rate when it
bought �2,589,271,787 on Aug. 2, 1993. FF916,601 is $152,196
according to the published exchange rate of FF6.0225 to $1 on
Aug. 2, 1993. $235,571 plus $152,196 = $387,767.
Page: Previous 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 NextLast modified: May 25, 2011