Caterpillar shares flat day after U.S. authorities raid offices
- Author: Zachary Reyes Mar 05, 2017,
Mar 05, 2017, 9:13
Shares of Caterpillar (CAT) fell sharply Thursday as federal investigators searched at least three of the USA heavy equipment giant's IL facilities.
Federal investigators descended on Caterpillar facilities Thursday, including its headquarters, sending shares of the industrial heavyweight sharply lower.
The Senate subcommittee report found that Caterpillar had no parts warehouses in Switzerland, but 85% or more of profits from Caterpillar's parts sales outside the U.S. were recorded as coming from SARL.
Shortly afterwards, Caterpillar stock fell, losing nearly 5 percent of its value.
"We believe the execution of this search warrant is regarding, among other things, export filings that relate to the CSARL matter", Caterpillar officials said in a statement. "Caterpillar is cooperating", company spokeswoman Corrie Scott said in a statement, offering no further comment.
The lawsuit alleged that Cat shifted profits to offshore shell companies to avoid paying more than $2 billion in US taxes. Caterpillar has come under federal scrutiny before.
Facilities in East Peoria and Morton, Illinois, also were raided under a federal warrant, U.S. Attorney's office spokeswoman Sharon Paul said.
Last week, the Executive Chairman of Caterpillar sat around a conference table in the White House, joined by President Trump and other heads of industry.
The shifting of profits to the Swiss subsidiary made Caterpillar pay effective taxes of 4 percent to 6 percent only. The officers executing the warrants asked Caterpillar employees to leave the buildings. Caterpillar also scrapped plans to build a new headquarters in downtown Peoria, which is located about 175 miles southwest of Chicago. Officials have sought information regarding "the purchase and resale of replacement parts by Caterpillar", dividend distributions and more, according to the filing.