Antoine Deltour’s trial will start tomorrow with the Panama Papers revelation still fresh in everyone’s mind. Philippe Penning, one of Deltour’s lawyers in Luxembourg, speaks to Carlos Martin Tornero.

On the back of the Panama Papers revelations, Antoine Deltour is facing the beginning of his trial in Luxembourg. Perhaps this is a factor that his legal team (William Bourdon in France and Philippe Penning in Luxembourg) will harness before the criminal court judges who will conduct the LuxLeaks trial from tomorrow until 4 May.

The LuxLeaks documented how multinationals used Luxembourg to reduce their tax bills through sweetheart deals reached with the then Junker-led government. The public learnt about it thanks to Deltour, a junior PwC accountant who left the firm in 2010.

Both the Panama Papers and the LuxLeaks bear significant similarities. Both involved a collaborative investigation of the International Consortium of Investigative Journalists (ICIJ). In both leaks the public found out about how well-known public figures and companies were dodging taxes.

In both cases, a professional services firm was behind the scenes, making possible the tax miracle of the loaves and fishes, but this time benefiting a privileged minority. As tax justice campaigners might argue, it’s not about the wealthy giving back their fair share to society but rather concealing it from the hungry multitudes.

In the Panama Papers a law firm was the enabler of tax avoidance; whereas in the LuxLeaks it was the Big Four accountancy firms who were questioned for their role in this however legal activity, particularly PwC.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

"Our main argument is that he is a genuine whistle-blower, and therefore needs some protection," Penning tells The Accountant, emphasising that Deltour’s motivation has been to act for the common good and he has spurred a necessary debate on tax avoidance issues.

The Luxembourg court could condemn Deltour to up to a 10-year jail sentence and a fine worth €1.2m ($1.3m) for charges such as theft and violations of professional secrecy and of trade secrets.

French journalist Edouard Perrin and another ex-PwC employee also face charges in the LuxLeaks trial.

It all started in May 2012 when Perrin broadcasted in French TV show Cash Investigation a documentary with the first allegations that PwC had reached sweetheart deals with the local tax authorities on behalf its clients.

Penning says: "PwC noticed that somebody must have stolen something, so it launched a complaint and the prosecutor followed up this complaint with an investigation."

Deltour’s home was examined and some computers seized by an investigative magistrate. Later, in November 2014, the ICIJ released the full LuxLeaks files worldwide.

Penning adds: "That was a bomb. But you have to know that Antoine Deltour left PwC in 2010. And there were some documents from 2012, so those couldn’t come from him."

That’s why, he explains, the documents dated after 2010 leaked to Perrin might have come from the second PwC employee whose identity hasn’t been disclosed.

However Penning emphasises that the main fight is to convince the court that Deltour deserves protection, even if there are no legal provisions for whistle-blowers in Luxembourg covering what Deltour did.

Penning says other laws and decisions from the European Court of Human Rights might be relevant and applicable "to make the judges set Antoine free".

Asked if it will press charges against Deltour, the other former employee and Perrin, or if it will seek damages against them, a global PwC spokesperson told The Accountant that the firm won’t make further comments than those included in the statement below.

But according to Penning, PwC is "not really bad" after Deltour. "Now the case is in the hands of the prosecutor, although PwC can claim for civil damages in the criminal court."

However the amount will be symbolic, he continues. "Let’s say [it would claim] some damages to reputation here in Luxembourg (instead of fees for lost clients). I think they are going quite softly. I think they should. Otherwise it can backfire for them."

PwC Luxembourg statement

"Following the discovery of breaches of confidentiality they were reported to the relevant authorities who decided to prosecute the two former PwC employees who took the documents and the journalist involved.

"PwC Luxembourg stands by the advice it provided to the clients in question, all of which was given in accordance with applicable local and international tax laws and agreements and also in accordance with the PwC Global Tax Code of Conduct.

"PwC takes client confidentiality very seriously and regrets that these breaches occurred. PwC Luxembourg conducted a thorough review of its security systems and processes in 2012 and has taken steps to further reinforce its security measures to protect the confidentiality of its client information.

"Given this matter is now the subject of a criminal trial it would not be appropriate for us to comment further."

Commenting on the case, Prem Sikka, professor of accounting at the University of Essex, tells The Accountant:

"Client confidentiality is all very well, but the leaked papers beg questions about accountants’ duty to the public."

Sikka made reference to the inquiry of the UK Parliament’s Public Accounts Committee that subjected PwC’s UK head of tax, Kevin Nicholson to a two-hour interrogation over the firm’s involvement in the LuxLeaks scandal.

From the LuxLeaks emerged 548 letters with PwC headed paper, whereby a number of complex tax structures were set up for multinationals such as Dyson, Amazon or FedEx.

MPs described this as PwC’s "mass-marketing" of tax avoidance "on an industrial scale", an activity the firm denied being involved with.

Sikka says: "Not one of the PwC headed paper letters say anything on ethics or the effect of the advice on the public, government finances or anything else.

"Clearly, the boundaries between what is public or private need to be redrawn and whistle-blowers need to be protected from the pressures suffered by Antoine Deltour".