Romanian IT distributor RHS Company goes insolvent to continue operating during VAT fraud investigation
The Bucharest court approved the start of insolvency procedures for IT distribution firm RHS Company. The insolvency request was filed by the company, and, according to its lawyers, is not due to a lack of profitability. The move is instead a way for the company to access frozen accounts and stay in business amid suspicion of a EUR 22.2 million fraud at RHS and competitors Scop Computers and Romsoft.
The country's Fiscal Administration (ANAF) seized the accounts of RHS Company, believing services were bought from a 'phantom' company to deduct the VAT. Romsoft is suspected to have done the same. The VAT was of some EUR 22.2 million, but RHS appealed the tax administration decision in court.
“The insolvency does not get in the way of the measures taken by ANAF, considering that there is no court order to confirm the tax debt and that tax administration decision had been appealed. It is simply the only way for the company to stay in business, which clearly benefits the 200 employees, the state budget and the IT market,” said lawyer Remus Borza, who coordinates Euro Insol, the judiciary administrator for the IT company.
RHS Company, set up in 1999 by Romanian businessman Dragoş Alexandru Popescu, ended 2010 with a turnover of EUR 80 million, being the biggest importer of brands such as Fujitsu, LG Electronics, AMD, Brother, Intel, Canon, HP, Sony, Kingston, Samsung in Romania and main supplier for retailer Altex, Domo and several hypermarkets.