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(Bloomberg) — Commodities trader Trafigura Group plans to re-domicile a key holding company through which employees own their shares in the business from the Netherlands to Bermuda.
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Trafigura Beheer BV is the Dutch entity that a group of disaffected former employees of pioneering trading house Marc Rich + Co. used to start Trafigura in 1993. It was the group’s parent company until a restructuring in 2015 — when a Singaporean entity became the new parent — though remains a holding firm and the entity through which Trafigura employees own their shares.
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The planned move was recently communicated to Trafigura shareholders, according to several people familiar with the matter, who asked not to be identified as the information wasn’t public. It would make Trafigura the second major commodities merchant to shift a key holding company to Bermuda in recent years, following such a move by Mercuria Energy Group Ltd.
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A spokesperson for Trafigura said that the trader would remain resident in Singapore for tax purposes.
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“Trafigura Beheer BV (TBBV), a former parent company of the Trafigura Group, is considering a change to its legal domicile from the Netherlands to Bermuda — an arrangement adopted by several international companies, including in the commodities sector,” the spokesperson said. “TBBV will remain tax resident in Singapore.”
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The motivation for the proposed move isn’t clear. It comes amid a growing list of European Union regulations that could affect commodity traders, including the Corporate Sustainability Due Diligence Directive, which makes large companies liable for fines of as much as 5% of their global turnover.
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Trafigura has been in the spotlight in the Netherlands in the past. In 2010, a Dutch court fined it for illegally exporting toxic waste that was ultimately dumped in Ivory Coast’s Abidjan.
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Dutch prosecutors have also investigated a 2006 payment by the company of around $500,000 in Jamaica for suspected bribery. The Trafigura spokesperson said that this case had now been “dismissed” by the Dutch Court, “marking full closure of the last remaining legal process in this matter.”
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Trafigura will continue to have a sizable presence in the Netherlands. Its Nyrstar unit owns the country’s Budel zinc smelter, which employs over 450 people, and it also has an office in Amsterdam.
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