Press Release
Swatch Group: Comments on media articles published today regarding the
employment conflict with two former employees and their allegations about tax
evasion
Biel/Bienne, August 13, 2004 - The Swatch Group Ltd. is aware that Messrs. Joe Ede and
M. Phanthala filed a complaint with the US Department of Labor alleging discriminatory
employment practices under the Sarbanes-Oxley act.
The two persons had been working for the Swatch Group as regional controllers (not
Senior Executives) in the Far East, one located in Hong Kong, and one in Singapore. Both
persons were employed by The Swatch Group Management Services SA, Switzerland.
They have never been employed in the USA.
The Swatch Group is of the opinion that it does not fall under the jurisdiction of the
Sarbanes-Oxley act as its shares are not listed on a US stock exchange. Nevertheless, the
Swatch Group takes the allegations very seriously and the Top Management ordered and
started an internal investigation as soon as it was informed of the complaint.
The actual case reported by the Wall Street Journal and the Financial Times concerns a
pure employment dispute between the Company and former employees, of whom one at
least wishes to receive higher severance pay than agreed in his contract. The case was
submitted to the US Department of Labor when Swatch Group refused a settlement, as
proposed by the lawyer of the two employees.
According to the first results of our investigation, it is confirmed that Swatch Group did not
violate laws. It is the strict policy of Swatch Group to vigorously respect all national and
international laws, including tax laws.
Nevertheless, it is normal practice for every company to structure its business in such a
way as to pay all due taxes without exception, but not more than required by the law, and
always within the rules given by existing laws and regulations.
Transfer price policy is a very complex matter. It not only depends on enormous currency
fluctuations, but also on t