LEGAL | Staff Reporter, Europe

Ex-McDonald's France directors probed in fraud inquiry: report

French authorities are looking into a 2009 accord on royalty payments.

French police questioned three former executives of McDonald's France on suspicion they helped shift profits to the US in order to cut French tax bills, according to prosecutors.

AFP reported that the executives, including former McDonald's France and later McDonald's Europe CEO Denis Hennequin, were summoned by anti-fraud investigators at the behest of the National Financial Prosecutor's office.

A source initially told AFP that four former directors had been detained for questioning but the financial prosecutors later clarified that just three were being quizzed.

The inquiry focuses on a 2009 agreement between the subsidiary of the American fast food giant in France and its parent company.

Under the terms of the accord, McDonald's France doubled the royalty payments to the US headquarters to 10% of its sales from 5%. Investigators claim the move “deprived” French tax authorities of millions of euros that instead went to American shareholders.

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