11.2M€ tax fraud: The story of Dirk van Praag and the Hugo van Praag company (Vanden Borre)

Hugo van Praag

Hugo van Praag, head of a fortune estimated at 37 million euroswas widely known as the founder of the household appliance chain that bore his name. Born in 1949, this pioneer began with the marketing sewing machines, the company's mainstay until 1965. Gradually, domestic appliances were added to the range.

From 1975 onwards, the emphasis was on expansion, with the opening of large outlying stores. At the end of the 20th century, in 1999 to be precise, the company was acquired by Kingfisher, an entity listed on the stock exchange. This acquisition marked a turning point, not only for the company, with the gradual disappearance of the Hugo van Praag signs in favor of Vanden Borrebut also for Dirk van Praag, the only son involved in the company, who then distanced himself from the family business.

However, Dirk's story doesn't end there. In 2004, he was arrested with a tax consultant for alleged tax evasion of on the order of 11.2 million eurosa sum allegedly evaded when the company was sold. After five months in pre-trial detention and a trial full of twists and turns, including the involvement of the Swedish justice system and an international fraud network, the case took an unexpected turn.

Procedural errors were raised, leading to a retrial. In 2020, the verdict was in: neither EY nor Dirk van Praag were found guilty. EY argued that the players involved, including Dirk's advisors, had been duped by a Swedish criminal network, which had also been jconvicted of fraudulent practices in his home country.

The situation clarified that neither EY nor Dirk van Praag had been involved in the development of the fraudulent structures and that they themselves were victims of the scheme. This conclusion underlined the complex international aspect of this fraud network and the ease with which it was able to mislead various professionals in the financial sector.

Hugo van Praag Company:

• Foundation : Start-up in 1949
• Sector: Appliances
• Expansion : Concentration on superstores from 1975 onwards

Court case:

• Accusation: Suspected tax fraud in 2004
• Procedure: Revision due to procedural errors
• Verdict 2020: No wrongdoing by EY or Dirk van Praag

The reputation and integrity of a family business and its sole heir were affected, but the conclusion of the trial rehabilitated their name in a business environment unfairly complicated by organized crime.