You have received the following email from Marcus Svenson, Finance Director:

From: Marcus Svenson, Finance Director

To: Senior Finance Manager

Subject: Investment opportunity

Hi,

The Board is considering an investment opportunity to buy a forest in Bravador, a country in South America. This will be a major expansion and will also enable us to diversify into new lines. For example, the forest contains lots of hardwood varieties that we could sell to companies in the double glazing industry or to furniture manufacturers. I downloaded the attached extract from an online encyclopaedia for your information.

The forest that we are planning to buy has not been used for commercial purposes until now. The land belonged to the Government for many years and it has been left to grow naturally. The Government is now keen to sell the land and has agreed that it may be used for commercial forestry purposes.

This investment will enable us to increase our output of softwoods by up to 20% per year, in addition to enabling us to enter the hardwood market.

I need two things from you. I need you to recommend a suitable approach to managing our relationship with the Bravadorian Government. I also need you to identify and explain the political risks that will remain even if we succeed in creating a sound relationship with the Government.

Marcus

Reference Material:

You have received the following email from Peter Sorchi, CEO:

From: Peter Sorchi, Chief Executive Officer

To: Senior Finance Manager

Fwd: Tax avoidance article

Hi,

I am forwarding you an email from a journalist. It came in via our press office, who passed it up the management chain and it ended up in my inbox.

Some of the basic facts stated in the draft article are correct:

 We do have arrangements in place with leading tax advisers for referrals of potential clients. We pay a commission for all such referrals, which the tax adviser is required to disclose to the client.

 Barry Crauder has been one of our largest clients for many years. He owns significant forested land and we manage that in return for our usual fee.

 We do not offer tax advice, or promote forestry as a tax-efficient investment. We simply offer a forestry management service as a paid service.

I would like you to address the following issues and I need your reply as a matter of some urgency.

Could we be accused of behaving unethically with respect to this aspect of our forestry management service?

Please draft a response that we can submit to Sonia Jones. Please also give an explanation for the Board as to how you will address the fact that the draft newspaper article clearly makes us appear to be unethical. We will consider your draft and related comments at a meeting this afternoon, before submitting anything.

Peter

To: Press Office, Wodd

From: Sonia Jones, reporter, Daily Gazette

Re: Tax avoidance article

I am seeking a response from Wodd concerning the activities of the celebrity Barry Crauder. We have established that Mr Crauder has been investing heavily in forestry in order to avoid paying tax on the considerable wealth that he has amassed from his show business career.

We believe that a significant part of this story is the relationship between forestry companies such as Wodd and professional tax advisers. When researching this story I posed as a wealthy investor and approached several firms that specialise in offering tax avoidance advice to high net worth individuals. Four of the firms whom I approached recommended a forestry scheme and specifically recommended Wodd to manage it for me. I believe that Wodd has a close relationship with these firms and possibly others.

I have attached a draft of my story. I have sufficient evidence to support every fact stated. I am writing in order to give Wodd the opportunity to respond if it wishes to do so, although the story will run regardless. I will require your comment within 48 hours, otherwise, I will run the story as it stands.

Sonia Jones

Chief reporter, Daily Gazette

The following email has been forwarded to you by William Seaton, Director of Finance:

From: William Seaton, Director of Finance

To: Finance Manager

Subject: Yesterday’s Board meeting

Hi,

One of my fellow Board members made a brief presentation to the Board. I am attaching the slides that were used in this presentation.

I have to say that I thought that some of the advice being offered to the Board was incorrect, but I would rather make a positive contribution to the discussion and so I said very little.

I need you to email me your thoughts on the following:

 Your views on the presentation relating to tax matters

 Your views on the briefing relating to the decision making process

 Your views on the briefing’s recommendations on driving performance

 Finally, an alternative briefing note on driving performance. Ideally, that should be two or three headings, with a

clear explanation for each.

As usual, this is urgent. Many thanks for your help so far with this project.

William

The slides can be found by clicking on the Reference Materials button.