Boston, MA 10/03/2013 (wallstreetpr) – In a court ruling that BB & T Corporation (NYSE: BBT) has to take on its chin and move on a U.S. Court for Federal claims has turned down the company’s request to claw back at least part of the $688 million that has been charged to BB&T towards un paid taxes and fines. BB&T had to cough up this money for running a roundabout tax avoidance scheme in association with Barclays in order to hood wink IRA.
Judge Thomas Wheeler in his ruling rapped BB&T knuckles by terming the conduct of the company “reprehensible”. He further described the tax avoidance scheme put in place as an “economically meaningless tax shelter” which led to “conflict of interest” among various management members who were in the know of the scheme. He termed the entire scheme questionable for the kind of “pro forma legal and accounting opinions” which were acted upon by the company executives.
As a direct result of this ruling the firm will have to set aside $250 million in its accounts for this purpose in addition to the $281 million it had set aside in February. The ruling was given on September 22 and the stock reacted by shedding close to 3.4% of its market value. Since then the share price has struggled to regain lost value and is almost stagnant at $33.8 per share.
It is in this context one needs to read BB&T weak operational performance. The sales on a quarter on quarter basis saw a dip of close to 4.9%. This S&P 500 tracked company has a market cap of $23 billion with a $1.73 billion net income over a trailing 12 month period. It has a forward dividend yield of 2.72% for the year. At current valuations, the stock price represents a 6.9% dip from its 52 week high valuation.
