Zambian leader asked not to interfere in mining firm fraud case

Source: Xinhua| 2017-06-20 00:53:22|Editor: yan
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LUSAKA, June 19 (Xinhua) -- Zambian President Edgar Lungu should not interfere in a fraud case in which a state entity has dragged First Quantum Minerals (FQM) to court, an influential social and economic lobby group said on Monday.

The Zambia Consolidated Copper Mines Investment Holdings (ZCCM-IH), which holds minority stakes in most mining firms on behalf of the Zambian government, has dragged the Canadian-based mining firm and some of its directors to court over a 1.4 billion U.S. dollars claim.

The ZCCM-IH claims the mining giant used the money acquired from its Zambian subsidiary, Kansanshi Mine, as cheap financing for its other operations outside the country.

But last month, Lungu directed ZCCM-IH to drop the fraud case in a court in Lusaka, the country's capital.

Lungu, through his spokesperson Amos Chanda said arbitration over the matter should continue in another court in London.

The mining firm had written to the Zambia attorney-general, expressing fears that its director named in the case could be arrested if they entered Zambia.

But the Jesuit Center for Theological Reflections (JCTR) said the case must be allowed to be heard and that if need be the mining firm should pay the money due.

The organization said in a statement that this will send a strong warning to other institutions that were in the habit of defrauding the country and engaging themselves in suspicious activities that were robbing the country much needed revenue.

"We are dismayed by media reports that the state has intervened in the court proceeding where ZCCM-IH had sued FQM for defrauding them of 1.4 billion dollars. If this is true, it basically validates speculations that the government shareholding in the mining companies is compromised," it said in a statement.

It added that it was grossly unjust for the government to be urging citizens to pay taxes while big multinational companies were being treated with kids gloves with regards to their tax obligations.

The understanding is that government's objective in maintaining shareholding in the mining companies through ZCCM-IH is to safeguard and maximize the potential benefits from mining companies, while maintaining voting rights to influence decision making in Zambia's mining sector, it added.

It expressed worry that there have been little facts presented to justify State House's intervention on the matter, adding that this was another dent in the transparency and accountability in the mining industry.