US consumer activist Mr Ralph Nader said Microsoft's policy of not paying shareholders a dividend is designed to protect the company and its largest shareholders from paying higher taxes, the Wall Street Journal Europereported.
In a letter sent to Microsoft chairman Mr Bill Gates, Mr Nader called Microsoft's "failure to pay dividends year after year" an "inappropriate and we believe unlawful device" to shield Microsoft's profits from taxes, the newspaper reported.
In an interview with the paper, Mr Nader said Microsoft's $36 billion cash balance "is an engine for further monopolisation".
But Microsoft said it "works hard to comply with US federal income tax rules" and that the tax laws "recognised the need for companies to retain cash to fund their businesses".
AFP