Investors didn’t like General Electric (GE -1.47%) on Friday. The veteran industrials-and-more combination had its portion cost dinged by 1.4% on the day, a somewhat more regrettable downfall than the 1.1% slide endured by the S&P 500 file. The decline was sparked by news that a regulator was looking into its overseas operations.
Consequently, prior to market opening, Reuters reported that French financial regulators had searched General Electric’s facility in the eastern city of Belfort. The news agency added, citing a response from deputy financial prosecutor Antoine Jocteur-Monrozier, that this was carried out as part of a preliminary investigation into alleged tax fraud and money laundering.
According to the French official, the investigation is ongoing. It is the result of a complaint made by the facility’s unions and workers’ council. This claimed that General Electric transferred 590 million euros ($555 million) in profits to Switzerland or the United States. It was unclear how the industrial company allegedly accomplished this.
As a means of justifying the recent layoffs, unions had accused General Electric of making such transfers to book paper losses for the facility. The location employs approximately 4,000 people at the moment.
Now, it should come as no surprise that General Electric has denied the claims. It added that it submits to burden regulations in each locale in which it has tasks.
Following its acquisition of Alstom’s power business in 2015, the company purchased the Belfort site. Prior to that, it had granted Alstom a license to use the facility to manufacture turbines for General Electric.