Caterpillar says U.S. investigating its movement of cash overseas
Said it received grand jury subpoena requesting information related to undistributed profits of non-U.S. subsidiaries, cash movements
NEW YORK—The United States government is investigating how Caterpillar Inc. has been moving cash between its business units in the U.S. and overseas, the construction equipment company said.
Caterpillar said it received a grand jury subpoena from the U.S. District Court for the Central District of Illinois on Jan. 8 that asked for financial information related to undistributed profits of non-U.S. subsidiaries and cash movements.
Caterpillar did not give further details but said it is co-operating with the investigation and that it should not affect its business or finances.
The company disclosed the investigation in a filing with the U.S. Securities and Exchange Commission (SEC).
The filing also said, separately, that the SEC told Caterpillar in September that it was conducting an “informal investigation” of the company’s affiliate in Switzerland called Caterpillar SARL.
There has previously been criticism of Caterpillar’s tax strategy related to Caterpillar SARL.
Last year, a congressional report said that the Peoria, Ill.-based company avoided paying US$2.4 billion in U.S. taxes since 2000 by shifting profits overseas.
It said Caterpillar was using the Swiss affiliate to transfer the rights to profits from its parts business in order to avoid taxes.
At the time, Caterpillar said it followed all tax laws.
A spokesperson for Caterpillar did not immediately respond to a request for comment.
The company, which had revenue of US$55 billion last year, makes mining drills, tractors and other heavy machinery.
It has 114,000 employees around the world, with about 51,000 of them in the U.S.