New York (AFP) - Federal investigators descended on Caterpillar facilities Thursday, including its headquarters, sending shares of the industrial heavyweight sharply lower.
Law enforcement officials entered three facilities in and around Caterpillar's Peoria headquarters in the Midwestern state of Illinois "to execute a search and seizure warrant," the company said in a statement. "Caterpillar is cooperating."
Caterpillar said the investigation appeared to be linked to an existing probe of its Swiss affiliate, CSARL.
CSARL was the subject of an April 2014 US Senate investigation and hearing that said Caterpillar's operations remained far larger in the United States, with the comparatively small Swiss unit having "no business purpose other than tax avoidance."
The Senate report said Caterpillar shifted to CSARL taxable income totaling more than $8 billion, enabling it to avoid paying $2.4 billion in US taxes.
Caterpillar briefed US Securities and Exchange Commission staff on CSARL following a September 2014 investigation of the unit, the company said in a February 2017 securities filing.
Caterpillar also received a grand jury subpoena in January 2015 seeking financial information, including on the undistributed profits of non-US subsidiaries and the movement of cash among US and non-US subsidiaries, according to the same filing.
Shares of Caterpillar, which makes industrial equipment used by the construction, mining and oil industries, dropped 4.3 percent to $94.36, making it the biggest loser in the Dow.