Brazilian judge freezes Michelin assets in tax case

A Brazilian judge froze Friday some $300 million in assets owned by French tire-maker Michelin, a former Rio de Janeiro state governor, and five of his aides over illegal tax breaks.

Brazilian judge freezes Michelin assets in tax case
Former Brazilian president Luiz Inacio Lula da Silva and Luiz Fernando Beraldi president for Latin America of French tyre maker Michelin pose with the mascot during the inauguration of a new earthmove
Judge Neusa Larsen ordered the freeze in the wake of a Rio court decision in October ordering the parties to reimburse the government in the amount of illegal tax breaks received beginning in 2010.
At the time, Sergio Cabral was governor of the state of Rio de Janeiro. The tax incentives were given to support the expansion of a Michelin tire plant in the city of Resende.
Larsen ordered a freeze of 1.03 billion reais ($300 million) that should have gone to the Treasury, according to a statement published Friday. It did not specify a breakdown for Cabral, five of his former officials and
the company.    
According to Larsen, the tax breaks for Michelin “violated legal and constitutional precepts… that caused serious injuries to public coffers.”  In addition, the illegal tax advantages “certainly contributed to the financial crisis that is devastating Rio de Janeiro state,” she said.
Michelin said it would appeal. The company insisted that the incentives were part of Rio's economic and social development fund, an effort begun in 1997 to spur investment in the state and which is currently under investigation by the authorities.
The French company noted it has been present in Brazil for decades and that all its activities are conducted “with total integrity and respect for laws and their institutions.”
The court freeze comes after last week's arrest of Cabral, who governed from 2007 to 2014, on bribe-taking and money laundering charges. Federal police swooped in on his home on November 17, an offshoot of
Brazil's sprawling anti-corruption investigation codenamed operation Car Wash.
Cabral, of the PMDB party of Brazilian President Michel Temer, is charged with being part of a group that allegedly embezzled 220 million reais from public works projects, including Rio's Maracana football stadium.
Authorities are probing alleged embezzlement and bribery by some of Brazil's highest-ranking politicians in a scheme that ransacked the state oil company Petrobras.
The alleged corruption is rampant nationwide, but particularly so in Rio, a state that has hosted a series of international mega events over the past five years, notably the World Cup and this year's Rio Olympics.
Rio state is now struggling to keep afloat financially, with hospitals and emergency services running out of money. The state required a huge federal bailout on the eve of the Olympics to keep going.

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Michelin unveils Covid-era France picks despite criticism

The Michelin Guide reveals Monday its annual pick of France's top restaurants despite criticism over its decision to hold the awards while establishments remain closed in the Covid-19 pandemic.

Michelin unveils Covid-era France picks despite criticism
Auberge du Pont de Collonges. Photo: AFP

Three-star chefs can rest easy, however, after Michelin said none will be demoted as the health crisis rages.

The industry bible's boss Gwendal Poullennec defended inspections that led to 57 new stars overall, even though restaurants remain shuttered after lockdowns imposed last spring and again since October.

“It's an important decision to support the industry, despite the current situation and perhaps even because of the situation,” Poullennec told AFP.

“All the establishments that have kept their star this year or won one are restaurants that fully deserve it,” he said.

READ MORE: Michelin calls off its 2021 France ceremony, but insists there will still be a guide

Michelin has drawn fire for bestowing its verdicts as chefs rack up losses while adapting their menus for takeaway or deliveries — and food fans have little chance of booking tables anytime soon, with or without face masks.

The rival Best 50 list, based in Britain, cancelled its 2020 ranking last year, while France's La Liste said this month that instead of rankings it would honour innovative chefs who have persevered amid the pandemic.

Michelin called off the lavish gala ceremony that was to be held in Cognac, southwest France – the first time outside Paris – and instead will announce the 2021 winners in a YouTube broadcast from the Eiffel Tower.

'Consistent quality'

But Poullennec said all three-star restaurants will keep their stars – France including Monaco counts 29 – while the handful of demotions will affect only restaurants that have closed or changed their dining concept.

He insisted that inspectors worked double duty and even cancelled their sacrosanct summer holidays to eat and drink as much as possible when restaurants were allowed to open under strict virus restrictions between France's lockdowns.

Michelin also brought in inspectors from elsewhere in Europe and even Asia to back up the French team.

“This selection has been made with the same serious attention, and inspectors were able to judge as many meals as the previous year,” he said.

“Despite the difficulties, chefs have risen to the occasion and maintained consistent quality, at times even succeeding in making further progress,” he added.

Poullennec, who took over the guide in 2018, has overseen several choices that have raised eyebrows among chefs and foodies alike.

Last year Michelin shocked industry insiders by downgrading the Auberge du Pont de Collonges — the oldest three-starred restaurant in the world — after the death of its legendary chef Paul Bocuse.

And in January 2019, Marc Veyrat became the first chef to sue the famous red guidebook after it withdrew the third star for his French Alps restaurant La Maison des Bois just a year after it was awarded.

Veyrat, who lost his case, has said he never wants to see a Michelin inspector in any of his restaurants ever again.