GLENCORE STOLE BILLIONS
By Brave Kachusha Mushikita
In 2008, the Zambian Revenue Authority(ZRA) engaged a Tax audit team consisting of Grant Thornton and EconPovry to audit Mopani Copper Mines, then owned by Glencore, covering the activities from 2006 to 2008, and examined the trial balances since 2003.
Major Findings;
- Mopani had increased the cost base without explanation of US$381.21m in 2007 than in 2005.
- Between 2003 & 2008 there was cumulative difference in revenues of about US$700m in copper revenues. Mopani was selling copper at less than 75% of LME price to its parent company Glencore in Switzerland. There was reason to believe that there were similar problems with cobalt sales but the figure was not determined.
It’s safe to say that Glencore hid more than US$1bn from ZRA between 2003 to 2008.
Unfortunately the govt of the day, the Bwezani Banda led MMD did not give ZRA political support to go after Glencore, giving the usual reason of not trying to upset the investors. Guess who was the Minister of Finance and political head of ZRA. It should also be noted that the CEO of Mopani at the time including the CFO were Zambians educated by Zambia taxes.
It was only after Michael Sata’s PF came into power that there was political will to pursue Glencore over the tax avoidance. Glencore played every trick in the legal book to avoid taking responsibility and paying for their banditry behaviour. They took the matter through all the stages of the Zambian courts until The Supreme Court delivered its judgement on 21 May 2020(11 years later) and fined Glencore US$13m only.
Did this judgement make the headlines? Yes it did but it was the PF govt which was painted in bad light as being anti foreign investment.
Today we are reading all over the media of the fining of Glencore of about US$1.1bn in the US court for their banditry behaviour. Just remember Zambia did it first.
Its unfortunate that today Zambia is sitting with Mopani Copper Mines needing about US$1.5bn to pay Glencore to own it when she has already paid twice over.
Let’s not forget what President Thabo Mbeki told us; Africa loses about US$50bn/yr in illicit financial flows, and in the last 50 years Africa has lost more than US$1trillion, this excludes capital flight!!!!!!!!!!!!!!!!!
Africa, as Africans this is what we should be discussing on African Day. Unfortunately like pets we preoccupy ourselves discussing if the crumbs had some cream or not.