Mitt Romney firms under scanner

KKR and Bain Capital, the buy-out firms co-founded by Republican presidential candidate Mitt Romney, are two of at least a dozen private equity groups reported to be under investigation over a strategy that allegedly saved them millions of dollars in tax.

The buy-out firms are said to have been subpoenaed by New York's attorney general Eric Schneiderman over their use of a tax-cutting method.

According to the Telegraph, the subpoenas were issued in July and the probe is being carried out by the attorney general's Taxpayer Protection Bureau.

The agency is investigating 'firms that rip-off government pension fund, contractors that over-bill taxpayers, and large-scale tax cheats', the report said.

The probe is thought to centre on so-called management fee waivers, in which private equity firms convert fees into fund investments, the report added.

According to the report, the investigation will likely carry out further scrutiny of Romney's profit-making business history.

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