Wednesday, March 06, 2013

Dow Chemical and Paris Hilton

Much like Paris Hilton or the Kardashian sisters [*] are famous for just being famous, I sometimes wonder if Dow Chemical isn't in the business of just being in business. They certainly aren't making news for innovative chemicals but rather for legal decisions.

I already mentioned the price fixing decision that went against them a couple of weeks ago. On the up side, there is a $2.5 billion dollar decision that the International Court of Arbitration confirmed in their favor from the failed K-Dow joint venture. I just wouldn't hold my breath on collecting that money soon. But there is also a couple of recent tax decisions that went against them. In one case, they were found to have illegally claimed certain materials and work efforts as R & D (meaning that it could be used as a deduction in their tax filings). It's only $8 million that we're talking about here, but the other case is much more significant. In that case, Dow tried to establish tax shelters and create $1 billion worth of tax deductions. When the judge issues statements such as "Dow viewed its tax department as a profit center" and "tax law deals in economic realities, not legal abstractions", you know you're in trouble.

It would be nice to see Dow Chemical proudly announce the development of a new polymer, one that they are going to really provide enough support for the long term development of the market (unlike the pull-the-pug-quickly effort for Questra).

[*] I never thought I would mention Paris Hilton and the Kardashian sisters in a polymer blog. The world works in strange ways sometimes.

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