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Tuesday, 4 June, 2002, 16:31 GMT 17:31 UK
Tyco ex-boss faces tax charges
Former Tyco chief executive Dennis Kozlowski
Dennis Kozlowski, former chief executive of US conglomerate Tyco International, has been charged with avoiding New York state sales taxes on purchases of artwork worth $13m.

Manhattan-based prosecutors said on Tuesday that Mr Kozlowski's unpaid tax bill stands at just over $1m.


He's someone that pushed the envelope, and this is something that could lead to further questions of the company

Steven Altman
analyst, Commerzbank in New York
The artwork in question included a painting by French impressionist Claude Monet.

Mr Kozlowski, who had run Tyco for ten years, resigned unexpectedly on Monday for what the company's board called "personal reasons".

Mr Kozlowski is credited with transforming the company from a small manufacturing firm into an industrial giant with interests ranging from fire alarms to medical equipment.

But his strategy of aggressive acquisition-led growth fell out of favour earlier this year amid mounting concerns that the company's complex structure could be masking its true financial position.

Dented confidence

For some, the charges levelled at Mr Kozlowski have reinforced these concerns.

"He's someone that pushed the envelope," said Steven Altman, an analyst at Commerzbank in New York, "and this is something that could lead to further questions of the company."

The collapse late last year of US energy trading giant Enron, which concealed hefty debts using a series of external partnerships, has heightened investor concerns over the transparency of corporate earnings statements.

Confidence in Tyco received a further dent in April when it reported a hefty first-quarter loss, and scrapped plans - initially welcomed by investors - to split into four separate companies.

Tyco shares were slightly higher at $16.05 on Tuesday afternoon, having lost 27% of their value on Monday.

The company's share price has fallen by two thirds since January.

 WATCH/LISTEN
 ON THIS STORY
Bill Symonds, Business Week
"One of his nicknames was deal-a-day Dennis."
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