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Tax problems and merger for Kirch.

An old tax case is pursuing German media mogul Leo Kirch, boss of Beta. He is accused of having evaded taxes on an undeclared transaction worth $250 million. The word in some German newspapers is that, if found guilty, Kirch could face up to 10 years in jail.

According to official reports, the tax evasion goes back to 1990, when Kirch sold film and TV rights for $330 million to Otto Beisheim's MH MedienHandels. A few months later, Beisheim's company sold the same rights to Sat1 and ProSieben for $937 million, yielding Beisheim profits of more than $600 million. German tax authorities seem to believe that Beisheim turned some of that profit back to Kirch and that he failed to report it as taxable income. Beisheim is a Swiss entrepreneur who owns other conglomerates such as Kauhof, Vobis, TUI and LTU and who has worked closely with Kirch in the past. Last year, German tax authorities inspected Kirch's offices and his Swiss residence.

In other news, Kirch has managed to merge his digital TV platform, DF-1, with Premiere, the pay-TV service Kirch jointly owns with CLT-UFA. The Munich-based DF-1 channels will reportedly be moved to the Hamburg headquarters of Premiere by January 1998. At the same time, Premiere will convert to digital. The unified service will retain both the Munich and the Hamburg bases. Kirch has reportedly lost some $350 million on the DF-1 venture.
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Title Annotation:German media mogul Leo Kirch
Publication:Video Age International
Article Type:Brief Article
Date:Oct 1, 1997
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