#DolceandGabbana ethical vs unethical business practices in the fashion sector

Posted on June 19, 2013

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Over all the Internet magazine sites & Twitter tweets the word spread fast of #DolceandGabbana  have been convicted. Articles started to surface all over  social media & Internet about the sentencing of Domenico Dolce & Stefano Gabbana for tax evasion.

The Italian fashion duo have been found guilty of tax evasion by Judge Antonella Brambilla and sentenced to one year and eight months in prison. Neither Dolce nor Gabbana appeared at the sentencing in Milan and have continued to deny the charges.

Dolce, 53, and Gabbana, 49, met in 1980 when both were assistants at a fashion atelier in Milan, and became Dolce & Gabbana in 1982

dolce & Gabbana

#DolceandGabbana @mymulticast

They denied any wrongdoing. “Our conscience is clear,” Gabbana stated to   WWD  (Women’s Wear Daily) when their acquittal was overturned in 2011. “The decision is in God’s hands…We pretend it doesn’t exist. It’s not in our thoughts on a daily basis.”

“Tomorrow is another day,” said Dolce, adding: “We never did this for money…please write it down.”

They may not have had money on their mind or any idea what would happen to them around “tax evasion” when they began their business. Dolce explained that they “don’t want the money.” years ago, but ever since, these Italian fashion legends have amassed a fortune and it  has propelled them into the billionaires’ elite club.

In 2011, Dolce & Gabbana’s parent company reported revenues of just under $1.5 billion.  The two partners who own 50% of the private company a piece according to Italian legal filings, are worth well over $1 billion each.

The success of Dolce and Gabbana’s sexy corset dresses and sharply tailored suits favoured by celebrities such as Kylie Minogue, Kate Moss and Bryan Ferry have earned them a glamorous lifestyle. In 2009, they hosted popstar Madonna, a friend and client, for her birthday at their villa perched above the chic Mediterranean resort of Portofino.

dolce & gabban primavera estate 2013 sfilate milano. @mymultcast

#DolceandGabbana primavera estate 2013 sfilate milano. @mymultcast

The case involves an investigation that began in 2008, when authorities tried to crack down on tax evasion as the financial crisis began to bite. But the Dolce and Gabbana inquiry is one of the few high-profile cases to come to trial so far.

The designers  have made their fortune selling their sexy & beautiful  clothing line , perfume, purses and accessories.

The question that would comes to mind is,   how do  people practice integrity and ethics  in their everyday life and in their business   or they  may not depending on what kind of principles and morals we stand for.

Back to the issue at hand,  the initial findings of the prosecution sought for Dolce & Gabbana to serve in prison for two and a half years. The prosecution also requested prison time for Domenico’s brother and board member Alfonso Dolce, board member and general director Cristiana Ruella, and finance director Giuseppe Minoni.

According to WWD,  Dolce & Gabbana’s accountant, Luciano Patelli, may also be sentenced to a prison time of three years as he is believed to be the “main orchestrato of the evasion scheme”.

After today’s announcement, it was suspected that Domenico and Stefano would appeal the court action.  The  pair’s lawyers released a statement on Vogue

“With great satisfaction, we acknowledge that – for the second time – a judge of the Milan Court has reiterated once more the absolute innocence – because the allegations are untrue – of Mr Domenico Dolce and Mr Stefano Gabbana of the accusation of having unfaithfully declared their earnings (the “notorious” million dollars of Euros).

Even more so, we are satisfied about the result of this part of the verdict because, according to Italian legislation, the statute of limitations had already run out of the charge of misrepresenting income. Despite this fact, the judge felt the need to acquit them on the matter: this means that, according to the Italian law, the proof of their innocent is more than obvious.

On the other hand, as we had the chance to state during the trial, the charges were simply a paradox: the two designers were charged with not having paid taxes for an amount of money which was double of what they had actually earned.

The Court has ruled correctly to what we have always stated and has calmed all the citizens: nobody will ever be held responsible for not having paid taxes that exceed what they had actually grossed.

Frankly speaking, we were astonished that our thesis on the regularity of everyone’s behaviour related to the taxes omission payment by Gado, was not accepted. In fact, the CEO of this Company together with other people including the designers, were found guilty of having contributed in a violation of the said taxes declaration omission. We will strongly appeal this part of the verdict, certain that the result will be over-turned in appeal

The absolution of the designers for the declarations related to their individual earnings is at the same time blatant and dramatic, because, notwithstanding the same fact was ruled as non-existent by today’s Court, the Internal Revenue Service might proceed with their operations against them, fining them for the excessive and surreal amount of money of more than 400 million Euros.

Due to the fact that the two designers do not have this kind of money – as the judge stated today, that they have never earned it – most probably the Internal Revenue Service will attack their most precious part of their patrimony, which is their shareholding in the Dolce & Gabbana Company.

We are anxious to even think of what the economic and social repercussion of this act might mean”.

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