Attorney Roderich Schaetze: Elumeo SE Threatened by Massive Tax Impact/ Expert Opinion Sees No "Arm’s Length Principle" Between Group Subsidiaries / Germany and Thailand Could Reclaim EUR 17 Million / Possible Tax Evasion Under German § 370 AO


GERMANY – EQS Newswire – 23 September 2019 – 
The financially
troubled Berlin jewelry group elumeo SE may face back tax claims totaling 17
million Euros. This assessment is the result of an expert opinion commissioned
by Ottoman Strategy Holdings (OSH). The expert opinion is based on existing
contracts between elumeo SE and its subsidiaries as well as on the tax holiday
conditions, according with the Board of Investment, in Thailand. According to
these agreements, the German tax authorities are likely to make additional
claims for alleged profits of EUR 10 million, while the Thai government is
likely to make a further 7 million Euro for unfulfillment of the conditions of
the tax holiday granted to the Thai elumeo subsidiary PWK Juwellery Limited.

More than 600 workers of the Thai jewelry manufacturer PWK Jewelry Limited became unemployed after the German jewelry retailer elumeo SE ordered jewelry worth more than 30 million euros through its subsidiaries, but paid only a fraction of it. The PWK became illiquid and could no longer pay the salaries of their workers or the severance pay to which they are legally entitled. Before that the management of elumeo SE was exploring ways to fire the workers without having to pay them their severance pay. The workers demonstrated in Chantaburi and protested in front of the German embassy in Bangkok against the actions of the German managers of the listed company elumeo SE from Berlin. The public prosecutor’s office in Berlin and the Thai police authorities are investigating the management of elumeo SE for fraud.

This tax assessment is devastating news for the shareholders Frankfurt
Performance Mangament AG (FPM) and Heliad Equity Partners and other elumeo
shareholders, who have so far supported the Chairman of the Board of Directors
of elumeo SE, Wolfgang Boyé. During last extraordinary shareholders meeting of
elumeo, following the news of criminal investigations for fraud, in both
Germany and Thailand against Wolfgang Boyé and Executive Directors Thomas
Jarmuske and Bernd Fischer OSH requested the appointment of a special auditor.
The task of a special auditor would have been to investigate the factors which
led to social distress at PWK in Thailand, caused by hundreds of workers being
deprived of their legal severance pay and salaries. More than that OSH
requested the appointment of a special auditor to clarify the legality of
Chariman Boye’s actions and the general status of the company. However, in
spite of the criminal investigations, lawsuits in range of tens of millions of
Euro against the company, Raik Hoffman, representative of FPM pledged his total
trust and support in Boyé, voting against a perfectly normal, under these
circumstances, special audit.

The expert opinion exposes a web of complicated price transfer mechanism,
tax holidays, intermediary Hong Kong companies with no physical substance,
unpaid invoices, breach of the “arm length” principles, revolving
loans to pay dividends that exists only on paper, unfulfilled contracts,
subordinations of debts of tens of millions of EUR and setoff of dividends made
only on paper.

The expert opinion indicates a strong likeness of major tax evasion under
the German § 370 AO, based on the existing Agreements between elumeo,
Silverline Distribution Limited (Hong Kong intermediary company) and PWK in
Thailand, payments pattern and Chairman Wolfgang Boye’s own statements during
the shareholders meetings of elumeo. OSH will provide the expert opinion to the
tax authorities in Germany and Thailand.

OSH will continue to pursue its legal ways of action in order to have a
special auditor appointed by a German Court, in spite of Frankfurt Performance
Management’s vote against the legal clarification that would be generated by a
clear and full audit of this troubled company, which, under Wolfgang Boyé’s
Chairmanship lost more than 96% of its share price and became involved into
major financial disputes and social unrest, affecting the life of hundreds of

At this point, OSH, as the initial investor in elumeo SE, operator of Juwelo
TV, is greatly saddened by the fact that under the actual management and with
the support of other minor shareholders as Frankfurt Performance Management AG
(FPM), the company is caught into a situation that could, very likely, lead to
its insolvency, and continue to generate a grave wave of legal problems, both
civil and criminal, as well as major tax issues.

Until now, with no proof but erratic explanations, Chairman Boyé, denied all
these allegations. However, OSH is rising a very simple and legitimate
question, to the both, other shareholders and the market: “If such
illegalities-related conclusions are unfounded, why Chairman Boyé and his
supporters are fighting so hard against the appointment of a special auditor,
which, in case that there were no illegalities committed, would just clear the
company’s and his own name?”

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