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AG hints on probability to prosecute US mining firm and officers for tax evasion and export fraud schemes

Officers of Nyala Mines Limited and Columbia Gem House may face prosecution for allegedly breaching the law when they failed to disclose all income realised from the investment and engaging in trade mispricing as well as improper transfer pricing techniques, according to Malawi Attorney General

LILONGWE – Malawi is claiming over $300-billion from United States company Columbia Gem House for unpaid taxes on minerals extracted from the country and exported to the United States, the Attorney General told AFP on Friday.

A letter dated 26 July, 2022 from Malawi’s Attorney General, Thabo Chakaka Nyirenda, to Columbia Gem House accused the firm of evading duty on sales of rubies and sapphires mined at its Chimwadzulo Mine in Ntcheu, Malawi from 2008.

In an interview with AFP on Friday, Nyirenda confirmed he authored the claim letter.

“I confirm, it’s from me,” he said.

In the letter, Nyirenda alleges Nyala Mines Limited, a Columbia Gem House subsidiary, paid taxes of just $600 against projected $24-billion revenues from their Malawian operation.

He demanded the company pay Malawi’s government $309,600,000,000 in taxes.

“Nyala Mines Limited and Columbia Gem House breached (the law) when they failed to disclose all income realised from the investment and when they engaged in trade mispricing and improper transfer pricing techniques,” the letter reads.

Nyirenda said Malawi could seek to prosecute Nyala Mines Limited and Columbia Gem House and their officers, along with anyone implicated in tax evasion or export fraud schemes.

“It is Malawi’s position that you dishonestly changed the name of the mining company to Nyala Mines Limited to disguise the origin of the company, that is, so that the new name of the company sounded local to avoid suspicion and detection,” Nyirenda wrote.

He accused both Nyala Mines and Columbia Gem House of dishonestly exporting ruby and sapphire from Malawi, and profiting by not paying taxes and royalties due.

“I, therefore, demand from you the payment of the said sum of US$309,600,000,000 plus interest at the commercial lending rate from the date the said taxes and royalties fell due to the date of payment within 30 days,” the letter says.

There was no immediate comment from either Nyala Mines Limited or Columbia Gem House.

Source: AFP

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