HARDWARE companies are alleged to have shifted profits abroad by having offshore companies.
The allegation follows an investigation of the industry by the Commerce Commission.
The report highlighted bad accounting practice, profit shifting and exorbitant mark-ups.
Commission chairman Dr Mahendra Reddy said hardware companies had offshore companies in countries like New Zealand. As an example, he said those companies would receive orders from Fiji, which they then sent to Singapore where the industrial materials were sourced.
The materials would subsequently be shipped directly to Fiji instead of New Zealand.
The trick was in sending the invoices from New Zealand to Fiji.
The landing cost in Fiji would include the mark-up as a result of the "shipment to NZ" and "re-shipment to Fiji" even though the materials were directly sent to Fiji.
As such the landing costs would be high and would mean further mark-up to "recover costs".
Yesterday, hardware companies were still studying the report.
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