Police in Italy have seized assets from Italian jewellers and watchmakers Bulgari worth €46 million (£39.7m) as part of an investigation into tax evasion. Bulgari has been stripped of properties, including its flagship store in Rome, bank assets and company stakes.

Nicola Bulgari

The police investigation centres around the Bulgari family members Paolo and Nicola Bulgari, chief executive Francesco Trapani and the luxury group’s lawyer Maurizio Valentini, although no arrests have been made.

The four men are accused of making fraudulent declarations about €3 billion (2.6bn) of revenues by using foreign subsidiaries. The period into which the police are looking runs from 2006 to 2011, which falls before the acquisition of the Italian watch and jewellery brand by luxury group LVMH.

Bulgari is reported to have said that  it “is extremely surprised” by the allegations and that it “will take all actions necessary to clarify its position”.

“The investigations have brought to light a true ‘escape strategy’ to avoid Italian taxes and in particular tougher rules that were introduced from January 1 2006 related to the taxation of dividends,” the police said in a statement.

Bulgari is not the first luxury goods group to come into the sights of the Italian tax police. Italian police in November confiscated €65m of assets, including a 15th century castle, from the Marzotto family and its business associates over suspected tax evasion connected to the 2007 sale of the Valentino luxury brand.

No doubt Bulgari will be keen to clean up this little affair before high profile TAG Heuer boss Jean-Christophe Babin takes over leadership of the brand in a few months time.