I.T.T. MOVE

Press, Volume CXIV, Issue 33479, 9 March 1974, Page 15

I.T.T. MOVE

N Z P A -Reuter—Copyright)

NEW YORK. March 8. The International Telephone and Telegraph Company (1.T.T.) said today that it would spend millions reimbursing former shareholders of a firm it merged with in 1970 if an appeal court ruled that the investors should have paid tax at the time.

I.T.T.’s acquisition of Hartford Fire Insurance Company was the largest corporate merger in United States history. Critics have since alleged that it only went through without violating America’s anti-trust legislation on monopolies because I.T.T. received co-operation from key Nixon Administration officials. In 1970, LT.T. was permitted to acquire Hartford by giving that company’s shareholders I.T.T. stock on which they would not pay immediate capital gains tax. But yesterday the Internal Revenue Service (1.R.5.) revoked its 1969 ruling to that If the I.T.T. stock had been taxable, I.T.T. would have to offer more than the SNZIOOS million they paid Hartford stockholders, since those stock-holders would have been liable to taxation estimated today at between SUS3S million and SUSIOO million (SNZI2 million and SNZ7O million). In a controversial memorandum just before the Watergate scandal broke, a Washington lobbyist for 1.T.T., Mrs Dita Beard, linked the Justice Department antitrust clearance with a proposed I.T.T. contribution of $NZ270.000 for the Republican national convention.