Twitter U.K. Faces Fines Over TweetDeck Accounting
Twitter misses U.K. government financial filing deadlines for TweetDeck subsidiary.
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Social media, Twitter, controversy. Nothing unusual, perhaps, in that combination these days. How about if you add, though, these words: "fails to file its accounting"?
That's the odd situation with social media giant Twitter, whose U.K. managers seem to have been too busy to comply with an important piece of financial paperwork.
In May 2011, Twitter acquired U.K. firm TweetDeck, a dashboard app built around the Twitter API designed to help power users of its system. Though no purchase price was ever officially disclosed, Wikipedia reports the widely held opinion that the San Francisco-based firm paid $40-$50 million, the price of out-bidding Bill Gates' UberMedia. Both firms were drawn to the company's global user base and the app's popularity with Twitter users.
But apparently, Twitter's attention has moved on since it won the bid. The company is in hot water with U.K. financial regulators as it has twice missed deadlines (in September and then December) to file paperwork with Companies House, a U.K. government register for company data. The penalty, if it continues to mess up, will be removal from that register, which means loss of certain immunities to local taxation and other business administration regulations.
The affair has raised a number of eyebrows. Rupert Murdoch's satellite news feed Sky News reported Tuesday that Twitter "declined to comment" when quizzed by its reporters. Commentators pointed out that the firm is now racking up penalties and fines which, if ignored, may lead to legal action, while others note the issue could possibly cloud Twitter's rumored spring 2013 IPO.
In mid-December Twitter provided accounting data for the period June 1 to December 31, 2011 for its U.K. division, but not for TweetDeck. Twitter U.K. earned profits of £16,500 (just under $26,500) on revenue of £484,723 (roughly $778,000), according to its statements. (Twitter's affairs in Europe are managed by a Dublin, Ireland, based holding company, with its named managers including the main Twitter CEO Dick Costolo.)
No one has suggested Twitter or its local TweetDeck managers are guilty of anything other than an oversight. But it has underlined the sometimes complex ways U.S. tech firms manage their European operations -- as well as the importance of paying enough attention to the regulatory structures of all the countries you operate in.
In any case, TweetDeck has 98 days to complete its filing or face penalties.
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