ActionAid welcomes Glencore loans freeze
ActionAid welcomes Glencore loans freezeBy Gift Chanda
Tue 07 June 2011, 08:20 CAT
THE decision by the European Investment Bank to freeze all new loans to Mopani’s parent company, Glencore should make the Swiss-listed company quickly “exonerate” itself from tax evasion allegations, says ActionAid.
The European Investment Bank (EIB) recently froze all new loans to Glencore and its subsidiaries, citing “serious concerns” over the group’s corporate governance.
It said it would ‘decline any further financing’ requests from the company, or one of its subsidiaries, as it conducts an internal investigation into allegations of tax irregularities at Mopani stemming from a leaked draft of an audit report by the accountancy firm Grant Thornton and Econ Poyry.
“As ActionAid, we welcome this move by the EIB because it is in line with our call on irresponsible business transactions, tax dodging and all matters related to denying African governments and countries that which is due to them,” ActionAid Africa spokesperson Henry Malumo said in an interview.
He said Zambia and other African countries continue to lose revenue from mining companies because governments do not take necessary measures to ensure transparency.
“There is a lot that the governments in Zambia and Africa in general are losing in the mining sector due to bad business practices. And to see EIB taking this step is a something positive and in the right direction,” he said.
“This defines global trading where investments whether from Europe or Africa benefits everyone. We should extend this even to other economic sectors.”
Mulumo also commended the government for taking a bold step to investigate the tax evasion allegation on Mopani.
“We understand the government in Zambia, South Africa and other SADC countries will work together to investigate the allegations,” said Malumo.
“These foreign investors are coming to Africa in the name of investing but they are applying foreign tax evasion tactics.”
Mopani has been accused by some non-governmental organisations (NGOs) of tax evasion and of causing widespread pollution.
The mining company has tried to deny the claims made in a draft audit report from the Zambia Revenue Authority (ZRA) on the mining company’s sales volumes, manipulated copper prices and improperly recorded hedges, saying the conclusions were based on “errors and inconsistencies” and were a “calculated move to tarnish the image and integrity of Mopani.”
But the EIB stated in its statement that its concerns went “far beyond” Mopani. It stated that it had commissioned its own independent probe into the matter.
“Any conclusive proof of tax evasion would lead to local penalties and could trigger early repayment of the loan,” the EIB said, adding, “it would, if necessary, improve its own due diligence audit mechanisms.”
In 2005, the European Investment Bank had loaned Mopani Copper Mines US $50 million for the renovation and modernisation of the Mufulira copper smelter.
Labels: ACTIONAID, EIB, GLENCORE INTERNATIONAL AG, MOPANI, TAX EVASION
posted by MrK @ 2:00 AM
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