Greg
Baxter won many awards for his spinning efforts at James Hardie over
the years, and the feisty lad is not backwards in coming forwards when
defending the position of his latest employer, Rupert Murdoch’s News
Corporation.

Baxter is said to have played very aggressively
with some of the suppliers of advice during the move to America last
year, with serious arguments only subsiding when Rupert Murdoch issued
an edict that all accounts were to be settled before Christmas. Having
suddenly saved $51 million in stamp duty by listing the family holding
on the Bermuda Stock Exchange, Rupert could be a little more generous
with everyone else who made the complex reincorporation move happen.

Crikey broke the Bermuda story last Tuesday, and Rupert specialist Neil Chenoweth followed up in the Fin Review
with a page-one feature on Wednesday that pushed the envelope somewhat
by talking about some exotic shuffling allegedly saving the Murdoch
family $1.25 billion in capital gains tax. This clearly enraged the
Murdoch camp, and Greg Baxter was ordered to fire off a letter which
finally made it into the Fin Review today, although not in the online letters section. The text read as follows:

Neil Chenoweth’s “Murdoch dodges tax of $1.25bn”
(March 23) failed to provide any evidence to support its headline or
page one prominence, despite spilling to a full page inside the paper.

Chenoweth
must not have heard of scrip-for-scrip rollover relief, a much-heralded
tax reform of some years ago. Without this piece of tax reform, News
Corp would not have restructured in the way it did, if at all. Why?
Because without scrip-for-scrip rollover relief most Australian
shareholders would have incurred capital gains tax on the transaction,
not just the Murdoch interests. It simply wouldn’t have made sense.

The
restructuring of News Corp was undertaken by a scheme of arrangement
that required approval of Australian courts, tax authorities and other
regulators and which was subjected to intense scrutiny before it
received an overwhelming yes vote from a record voter turnout. Clearly
the restructuring was not a “tax dodge”, there was no “side-stepping”
of any tax obligations and the Murdochs did not benefit at the expense
of other shareholders. All of these and other tax issues were described
in the information memorandum.

What Baxter fails to
point out is that the Information Memorandum did mention the $51
million stamp duty liability that was subsequently avoided with the
Bermuda tax lurk that we’ve described in detail on the site here. Taking issue with the Fin Review’s
CGT claim is fair enough, but we’re yet to hear any defence from the
Murdoch interests over the Bermuda shuffle, which is a blatant ruse.
And there was never any suggestion the “side-stepping” was at the
expense of other shareholders. The Bermuda shuffle is at the expense of
NSW taxpayers, the same people who gave News Corp the Sydney
Showgrounds for a $1 a year.

As you can see here,
trading in Karltholt shares was very quiet for about the 100th
consecutive day in Bermuda overnight. No shares were traded, as there
never will be.