(Reuters) – Warren Buffett’s Berkshire Hathaway Inc on Wednesday stated a $377 million charge it incurred just lately was tied to a solar era company that U.S. authorities have linked to fraud.
FILE PHOTO: Berkshire Hathaway Chairman Warren Buffett walks by means of the exhibit corridor as shareholders collect to hear from the billionaire investor at Berkshire Hathaway Inc’s annual shareholder assembly in Omaha, Nebraska, U.S., May four, 2019. REUTERS/Scott Morgan/File Photo
Berkshire stated in its first-quarter report on Saturday it had invested $340 million in numerous tax fairness funding funds from 2015 to 2018, earlier than studying that federal authorities had alleged “fraudulent income conduct” by the funds’ sponsor.
“We now believe that it is more likely than not that the income tax benefits that we recognized are not valid,” and took the charge for “uncertain tax positions” associated to its investments, Berkshire stated.
Buffett’s assistant Debbie Bosanek confirmed that the charge associated to DC Solar. Bloomberg News earlier reported its id.
Berkshire’s report had not recognized the sponsor by identify, and Buffett’s Omaha, Nebraska-based conglomerate has not been accused of wrongdoing.
Lawyers for DC Solar didn’t instantly reply to requests for remark.
DC Solar, whose merchandise embrace solar turbines in addition to mild towers that can be utilized at sports activities occasions, filed for Chapter 11 chapter safety in February in Reno, Nevada.
In a Feb. eight affidavit associated to these proceedings, an FBI agent stated the way by which the Benecia, California-based company appeared to have operated mirrored “evidence of a Ponzi-type investment fraud scheme.”
The U.S. Securities and Exchange Commission accused DC Solar’s house owners by identify of partaking in a Ponzi scheme, in accordance to a separate courtroom submitting.
Berkshire’s charge decreased first-quarter working revenue to $5.56 billion, up 5 % from a yr earlier.
This yr’s outcomes excluded the influence of Berkshire’s 26.7 % stake in Kraft Heinz Co, which has but to report audited quarterly outcomes.
Berkshire’s $340 million funding is small relative to its $738.7 billion asset base, which incorporates $191.eight billion of fairness investments and $114.2 billion of money. The company additionally has its personal renewable power tasks.
Reporting by Jonathan Stempel in New York; Additional reporting by Jennifer Ablan; Editing by Susan Thomas