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TAX NEWS - 2010

France Tax: French minister under pressure over L'Oreal heiress

PARIS - A government minister at the centre of a row over tax evasion by France's richest woman came under fresh pressure Friday when it emerged that prosecutors last year warned she might be dodging tax.

Labour Minister Eric Woerth, a high-flyer in President Nicolas Sarkozy's right-wing government, has denied his wife turned a blind eye to tax evasion as she helped manage Liliane Bettencourt's €16 billion ($19.8 billion) fortune.

His wife Florence Woerth has also vehemently denied being aware of any financial fraud on the part of Bettencourt, the 87-year-old L'Oreal heiress, and confirmed she would step down from her job.

But on Friday prosecutors in the Nanterre suburb of Paris said they had alerted tax authorities in January last year of possible financial fraud in the management of her estate.

"The fiscal administration was warned on January 9, 2022 of the fact that the dossier was susceptible to reveal elements of fiscal fraud," prosecutor Philippe Courroye told AFP.

The latest twist

Woerth is a rising star in Sarkozy's government who was known as "Mr Clean" and in a previous post led a major crackdown on tax evasion.

Bettencourt has been at the centre of a political storm since last week when secret tapes revealed she had allegedly conspired to hide money in Swiss bank accounts while making donations to friends in Sarkozy's UMP party.

Bettencourt pledged on Monday to declare all of her foreign assets to comply with French laws.

The tapes are the latest twist in a long-running family feud between the billionaire and her daughter, who claims Bettencourt is mentally unfit after she gave more than a billion euros to a photographer friend, Francois-Marie Banier.

Woerth said Friday he had personally ordered a tax probe of Banier last year.

Banier is set to go on trial next month on charges he took advantage of Bettencourt.
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