Row over mining profits

CASH FLOW: UNIONS CALL FOR PROBE INTO SAMANCOR’S OFFSHORE TRANSFERS

Company’s failure to make financial statements available and low returns sparked suspicions.

National Union of Metalworkers of South Africa (Numsa) members are frustrated over Samancor Chrome mining company dragging its feet to appoint a forensic internal investigation into fraud and profit shifting allegations.

Numsa called for an independent investigation into the Samancor Employee Share Ownership Programme (ESPO), the Ndizani Trust, after it was implicated in illicit financial flow allegations made by Associations of Mineworkers and Construction Union (Amcu).

Amcu accused the company of transferring money to offshore accounts to avoid tax.

Numsa spokesperson Phakamile Majola-Hlubi said their members were frustrated and disappointed in the company’s slow response into the serious allegations. She said they had been requesting for the investigation since February but their requests had not been responded to.

Numsa was supposed to have a meeting with Samancor to discuss the company’s status regarding the proposed investigation, but this did not take place.

Majola said the company’s failure to provide them with financial statements to see if members of the trust were paid fairly in the 2013 and 2018 payouts raised their concerns.

Samancor spokesperson Bridget von Holdt said the investigations were already under way, but Majola said they had not been made aware of that.

“A decision by Samancor, the Samancor Board and its recognised unions was taken to commission an independent investigation into the allegations by Amcu of which most date back more than 10 years,’’ said Von Holdt.

Amcu teamed up with human rights lawyer, Richard Spoor, to fi le a lawsuit against Samancor Chrome at the High Court in Johannesburg, earlier this month.

This followed a two-year investigation by the Union and Alternative Information and Development Centre and information received from a whistleblower and former board member that alleged Samancor had shifted millions of dollars to an offshore account in the years 2007, 2009 and 2013.

Spoor said Amcu filed for the court’s permission to litigate against Samancor, its current and former directors, and various other entities implicated in the transactions and an order that Samancor account for the true value of the transactions.

He said if granted the court’s leave, Amcu will seek the appointment of independent directors and the award of compensation to those harmed by the transactions.

Amcu president Joseph Mathunjwa said low returns from the Employee Stock Ownership plan also sparked their suspicions. He said profit shifting was a way in which multinational companies used to avoid tax that could help uplift poor communities.

Amcu has an interest in the company through its members in the Ndizani Workers ESOP Trust which indirectly owns 5.6% of Samancor. This part ownership made the unions interested in finding the true profit margins made by the company.

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