Business News in Brief: Tax authority writes off billions, benefiting half a million in the process

In other developments, the news wasn’t so rosey for companies with a major toy retailer, insurer and lots of farms declaring bankruptcy

The Skattemyndighederne tax authorities have written off 5.8 billion kroner from the bills of nearly half a million people in Denmark, reports Politiken. Some 485,000 have benefited from a move that was approved by Parliament.

Many are believed to be benefit recipients, early retirement pensioners and people on early retirement, and most were informed in mid-December.

Skattemyndighederne initiated the move as part of its plans to get public debt recovery back on track, which has been hit by data problems in recent years, leading to the termination of the EFI digital recovery system in 2015.

Denmark holds onto top credit rating despite money-laundering scandal
Fitch has followed the example of two other US credit giants, Moody’s and Standard & Poor’s, by giving the Danish economy an ‘AAA’ rating. There had been fears that the money-laundering scandals, most notably at Denmark’s leading bank Danske Bank, would result in a downgrade, but Fitch contended that the Danish banking sector was strong enough to absorb the fallout, although it conceded that “there is a risk of major fines, which can infect and lead to greater financial stability concerns”.

Borgen again, but no such luck for arrested bank employees in Estonia
Former Danske Bank chief executive Thomas Borgen has started his own company. Borgen is a sole proprietorship, providing business consulting and other business management advice. Meanwhile, ten people have been arrested by the Estonian authorities in connection with the money laundering carried out at the Tallinn branch of Danske Banke, which saw 1.5 trillion kroner pass through between 2007 and 2015. All of them are reportedly former employees.

Far fewer paying into early retirement schemes
Fewer people are paying into an early retirement scheme that enables them to stop working three years before the state pension payments kick in – between the ages of 65 and 72 according to the sliding scale system being implemented by the government. Just eight years ago, almost 50 percent of the members of 3F’s unemployment fund aged 30-39 paid a monthly amount of 508 kroner to qualify, but this percentage has now shrunk to less than 10 percent. Workers in the construction, hotel and restaurant industries are most particularly shunning the early retirement scheme. The early retirement pension pays out a maximum amount of 223,596 before tax a year, but this will be reduced by any savings and other pension contributions the recipient has.

Farmer bankruptcies worsened by summer drought
Around 300 farm owners lost their livelihoods last year, according to a DR survey. Cash flow tends to be the biggest problem, according to Palle Høj, the head of the Sagro consultancy, which specialises in helping farmers with their budgets. The long drought last summer – which cost the industry 6.4 billion kroner, according to Landbrug & Fødevarer – coupled with low prices has pushed many farmers into debt, and according to the survey, 159 farmers went bankrupt and nearly as many were forced to sell.

Bad year for Danish shares
Last year was one of the worst for Danish shares in the last decade, according to Lars Skovgaard Andersen, an investment strategist at Danske Bank, who confirmed to DR that optimism fell in the autumn as a procession of companies failed to deliver on their 2018 expectations. The C25 index of the country’s leading shares fell 14 percent. Other cited influences on the shares falling included Brexit, the trade war between the US and China, Donald Trump, and financial markets elsewhere.

Major toy companies close up shop as parent company goes bankrupt
It’s bad news for fussy kids! Clueless grandmas, lazy uncles and  fed-up parents might have thought it was a shrewd move buying them a gift voucher from Fætter BR and Toys”R”Us for Christmas, but the chains’ parent company Top-Toy has been declared bankrupt, and the vouchers are now worthless. Top-Toy cited highly unsatisfactory Christmas sales. Some 24 outlets remained open until December 31 to honour the vouchers, but they are now closed. The private equity fund EQT owned 73 percent of Top-Toy, while the founders, the Gjørup family, retained a 24 percent stake. In total there were 226 Fætter BR stores and 73 Toys“R”Us stores in the Nordic region – employing 2,124 full-time workers. Its last annual report, released in November, revealed a loss of 149 million kroner. “

Pharma giant eyeing Danish investment opportunities
US pharmaceutical giant Bristol-Myers Squibb (BMS) has signed an option to acquire the biotech company Galecto Biotech, which despite being listed in Sweden has its head office in Denmark. As one of the largest foreign investors in Denmark, BMS has invested 13 billion kroner since 2014. Plans are also afoot to acquire Swedish company Cormorant, with BMS indicating that its investments in the Nordics will continue.

Pandora in dispute with shareholder
A dispute between Danish billionaire Jesper Lautrup Nielsen and the Pandora jewellery chain will go to court this summer. Nielsen accuses Pandora of cheating him out of over a billion kroner by hiding its profits. He claims an ‘earn-out’ clause should have entitled him to a healthy slice of the profits of the jeweller’s subsidiary Pandora CWE – between 1.018 and 2.612 billion kroner.

Insurer declares bankruptcy
Qudos Insurance has gone bankrupt. The Danish insurance company had been encountering difficulties for a long period of time, and in mid-December a settlement failed to satisfy the required number of creditors. Garantifonden will only guarantee some of its customers’ compensation payments.