Issue link: https://maltatoday.uberflip.com/i/755517
11 MATTHEW VELLA THE clues to the prospective lay- offs at generics pharma company Actavis were already evident five months ago when multinational Teva acquired the company and announced it would be downsiz- ing operations. But it was artful in how it said it would be achieving its savings. Ralph Cassar, the Green Party's secretary-general, was the only voice at the time of Teva's ac- quisition of Allergan's generics business, Actavis Generics, to have read between the lines of Teva's plans for cuts. An industrial chemist by train- ing, Cassar had then pointed out that Allergan, which has a his- tory of multiple acquisitions of pharmaceutical companies, was centred around achieving sav- ings on tax through its residence in Ireland. In the statement on acquiring Allergan's generics company, Erez Vigodman, Teva president and CEO, said Teva expected "to achieve cost synergies and tax savings of approximately $1.4 billion annually [with] the sav- ings to come from efficiencies in operations, G&A, manufacturing and sales and marketing". Allergan plc divested itself of its generics business – which in- cluded Actavis Global Generics and the Netherlands-based Me- dis – for $33.4 billion in cash and $5.4 million in Teva shares. The 200 lay-offs announced this week by Actavis – which runs two manufacturing facilities in Bulebel and Hal-far – follow on similar redundancies in the factory's history. Back in 2014, some 110 employees at Arrow Pharm in Hal Far were also at risk of redundancy following the acquisition of Actavis by Watson Pharmaceuticals (which became known as Actavis plc in 2012). The restructuring was due primarily to a 50% reduction in packaging volumes at the facility, as well as a drive to make the Hal Far site more "cost competitive" in the face of aggressive global competition. In Malta Actavis employed around 850 people in 2014, hav- ing dismissed some 100 workers the year before when it closed down some of its manufacturing units and its R&D department. And the year's takings were not disheartening either: although not as positive as in 2013, Act- avis in Malta registered turnover of €105 million in 2014, and an €18 million pre-tax profit. The year before, it booked €113 mil- lion in sales and €20 million in pre-tax profits. Still, both years were far superior to 2012, when with €103 million in sales it made 'only' €11 million in pre- tax profits. But behind the global takeo- vers, lies a history of deals being effectively funded by US taxpay- ers, thanks to tax-dodging relo- cations that allowed Actavis, to- day renamed Allergan plc, amass great savings. Actavis itself was built by a rap- id succession of deals, starting in 2012 when Watson Pharma- ceuticals, of New Jersey, bought Actavis – then a Swiss company – for $6.5 billion and moving its tax domicile to Ireland. Then in 2015, the company Al- lergan, which made Botox, and was based and paid taxes in Ir- vine, California, was bought by Actavis for $66 million. All these moves allowed Wat- son to create larger companies while reducing its exposure to the United States tax rate. With these so-called inver- sions, an American company buys a foreign rival and then relo- cates to a new home abroad with a lower tax rate – something the Obama administration was keen to fight by adopting new rules that would make the deals less economically attractive to buy- ers and dissuade shareholders. Actavis got some of the benefits of reincorporating in a lower-tax country, such as a $25 billion deal to buy the New York-based Forest Laboratories and save on taxes after becoming an 'Irish' company. When it bought Aller- gan, analysts estimated that with the Irish tax rate of 16%, Actavis could shave $240 million to $370 million off Allergan's tax bill in 2015. Cassar was clear about the tax savings game in 2014 with these prophetic words. "Actavis, Arrow, Watson... the same shareholders, same US company. These have benefit- ted over the years from massive tax breaks, tax holidays and tax incentives, and other incentives such as payments for training and R&D out of national funds... in other words 'corporate wel- fare'. "The company is doing very well with revenues and profits increasing year after year, but corporate greed is never satis- fied… It is time to ask for them to pay back the tax breaks and other public funds they sucked up. A textbook case of corporate greed. Socialising losses and pri- vatising profits." With the Maltese government now intervening to save the 200 jobs at Actavis by making sure the workers can find alterna- tive employment, Alternattiva Demokratika – the Green Party, remains critical of the way de- regulated markets are allowing such global lay-offs. "The layoffs by Actavis's new owners Teva are proof of the damaging effects of a globali- sation based on greed. It is yet another example which shows the urgent need for EU govern- ments, the European and na- tional parliaments, to come to- gether and collectively regulate the runaway neoliberal system in which huge, short-term profits and shareholder value come be- fore social responsibility and the just distribution of wealth." AD said Actavis was consist- ently making huge profits, and said only a tax on financial transactions and capital flight could compensate for such cor- porate ruthlessness. "It's a game of Russian roulette on the stock markets at the expense of the livelihood of workers. Teva's 'consolidation' is just another excuse to make the super rich richer," AD said. maltatoday, SUNDAY, 27 NOVEMBER 2016 News Big Pharma's tax-dodging history: Actavis 'inversions' won it billions in savings on American taxes Actavis lay-offs should come as no surprise: Teva's takeover statement had announced it wanted to 'save costs' Actavis in Malta registered turnover of €105 million in 2014, and an €18 million pre-tax profit Notarial searches revamp to tackle long delays MATTHEW VELLA NOTARIES are experiencing long delays at the crucial search- es unit at Identity Malta, as er- rors in the way property registry notes are compiled are lengthen- ing processing duration and fees. Justice Minister Owen Bonnici has said the reason for the delays has been a persistent problem since the person who single- handedly manned the software for the searches, passed away. "The software was some 25 years old when this person passed away. Nothing ever hap- pened until 2015 when Identity Malta started working on an al- ternative solution that is gradu- ally developing," Bonnici said in a reply to a parliamentary ques- tion. Notaries who find errors in the way searches are being compiled at the Identity Malta registry are being asked to pay for the miss- ing notes when they request a correct search. The prospect of missing notes in notarial searches could pre- sent a liability for property buy- ers, Nationalist MP Jason Azzo- pardi noted in his PQ. Bonnici replied that the prob- lems being faced by notaries were made clear in a symposium organized by the Notarial Coun- cil, and added that information that had been compiled over the years had not been correctly verified. "These errors are increasing due to the increased volume of work especially in the property sector. Identity Malta is working closely with the Notarial Council to reduce the errors and a new system is being developed ac- cording to notaries' needs: very soon a revision of all the indexes will start, to amend all the past errors." Behind the global takeovers, lies a history of deals being effectively funded by US taxpayers, thanks to a tax- dodging relocation Ralph Cassar