South Africa: Craig McKune investigates mining company’s tax avoidance
Published by South Africa’s AmaBhungane and Mail & Guardian, this story by Craig McKune examines the tax avoidance practices of mining company Lonmin.
According to Craig, this was “one of South Africa’s first profit-shifting stories, examining a company's tax avoidance and the evidence I unearthed and Lonmin's contradictions were fuel for further reports by the NGO AIDC.” Craig also mentioned that “had the article not been published, most of the detail would have been lost in complexity and Lonmin's obfuscation. Now Lonmin is regularly criticised for funnelling its cash to Bermuda”.
This article, published on 16th October 2014, stimulated debate on social media, where it was shared 188 times on Facebook and Twitter, and was referenced in a report submitted by AIDC (The Alternative Information and Development Centre) to the Davis Tax Committee, which is assessing South Africa’s tax policy framework. On the basis of this article, Craig also earned himself a place as a finalist in the Sanlam Financial Journalism Awards for 2014.
Questions Lonmin must answer
Could Lonmin have afforded to pay the wages the Marikana mineworkers demanded in 2012 before 34 of them were gunned down by police?
This question is among the core issues that evidence leaders at the Farlam commission tried to unpack last month when they cross-examined the company’s former operations chief Mahomed Seedat.
At the commission’s final hearings, Seedat was asked to explain how and why Lonmin had shuffled huge amounts of money within its global structure, moving funds away from the South African mines – which employ its workforce – and into far-flung branches.
He was forced to disclose the secret details of how Lonmin had channeled hundreds of millions of rands to a subsidiary in tax-free Bermuda, and more millions were moved to the British parent company through its South African branch. Click here for full article.
