The 62-year-old Fanny Katsou, who is the first arrested for unpaid VAT after unpaid liabilities to the state have been turned into criminal activity will be sent to court. Katsou is the owner of a chain of shops for designer clothes, shoes and accessories in northern Greece and in 2008, she was named Business Woman of the Year by a magazine in the country. "A source of inspiration for me is the modern Greek woman, who always looks good and is well-informed about the latest trends in fashion, despite her many duties. I believe that expensive clothing is not a luxury, it is a manifestation of consumer culture not just of aesthetics and quality," said Fanny Katsou at the award ceremony for the Woman of the Year shortly before the economic crisis has hit Greece.
Currently, she is arrested and must explain why she has not paid on time the due VAT of € 681,000 and the penalty fees for the delay from April up to now. The actual amount for which the tax service and police have detained the owner of the commercial company Fanny SA is € 586,000 plus € 85,000 penalty for the delay. This is the VAT due for 2009, which had to be paid after the delays not later than the summer of 2011 as a first installment for repayment to the state.
However, the company of the 62-year-old businesswoman is in the red in early 2010. In March last year, Fanny SA declares bankruptcy and begins liquidation actions under Article 99 of the Code of bankruptcy. During this period, the total obligations of the troubled company are € 57 million, € 7 million of which are public accounts receivables. Among these are unpaid social security contributions of employees and tax liabilities of the company. € 28 million of the total amount of obligations are recorded as debts to third parties, € 18 million are due to banks and € 4.1 million are late payments to suppliers. The main reasons for the rapid collapse of the company is the dramatically reduced turnover and the serious increase in taxes, as well as the large number of loans, which were granted with great ease until 2008. The drop in company sales has reached 40% only for a year. The bad image of Greece on world markets has forced many international suppliers to refuse checks and to require 80% of the payments to be made in cash, despite the difficulties due to the lack of liquidity.
The list of similar tax offenders contains the names of 50 other entrepreneurs in Northern Greece, which soon may end up in the same situation. That is why some of them are taking advantage of the favourable conditions, under which obligations can be paid in installments. Thus, they can avoid arrest and subsequent court proceedings.
Fanny SA is one of the leading companies in the import and sale of clothes, shoes and accessories in Northern Greece, based in Thessaloniki and is EN ISO 9002/1994certified. Its story began about 26 years ago with the imports of clothing, and today, the company is one of the largest chains of retail shops of women's and men's fashion in northern Greece. The company has retail shops in major Greek cities and presents brands and designers like Vasler, Betty Barclay, Roy Robson, Elegance, Luisa Cerano, Frank Usher, Joseph Ribkoff, Diesel Company, Mexx, Escada, Marc Jacobs and Tommy Hilfiger.
In the "bright" years of the Greek economic growth, the company establishes itself as a leader in the retail trade in the district of Thesalonika and quickly opens a chain of shops. The company expands its activities, attracts new brands for the domestic market and even opens a café named after the company. The fight for greater market share requires big investments. This means more bank loans. In many cases, when entrepreneurs are faced with the dilemma "to pay the tax or the bank?" the bank always wins, because the consequences are much faster than from the hard-driven state machine. Following the outbreak of the crisis, every Greek entrepreneur or self-employed has faced with this issue one way or another. Some are doing well and are gradually paying the constantly growing obligations while others cannot withstand the pressure and fail. The general public opinion is that arrests because of overdue debt payments to the state will not be efficient because most businessmen are up to the ears in debts as Greece itself and there is no real money.
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