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Germany heightens tax probe of Kirch

BERLIN — Munich public prosecutors have stepped up their investigation of Bavarian media mogul Leo Kirch for suspected tax evasion. Swiss officials acting in cooperation with Munich prosecutors on Wednesday searched 12 offices and private residences belonging to Swiss billionaire Otto Beisheim, Zurich newspaper Sonntags Zeitung reported Sunday.

Swiss investigators were looking for documents supporting charges that Kirch cheated German tax authorities out of DM400 million ($220 million) through profit transfers to Beisheim’s MH Medien-Handels AG.

The company is based in the Swiss canton of Zug, which has much lower corporate tax rates than Germany.

Zurich district attorney Dieter Jann told Sonntags Zeitung that the transactions under investigation amount to $1.1 billion.

Munich officials have been suspicious of Kirch’s relationship with Beisheim since 1990, when Kirch sold the rights to 2,500 films to MH Medien-Handels AG for $291 million.

A few months after the sale, German commercial webs SAT1 and ProSieben purchased the films for an alleged sum of $879 million. Leo Kirch has a major share in SAT1, while ProSieben is controlled by his son Thomas.

In the course of these transactions, the reels of film apparently did not leave the Kirch archives in Ismaning near Munich. In March 1996, Munich prosecutors raided Kirch’s offices looking for evidence of the media magnate’s involvement in MH Medien-Handels AG.

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