"Malawi Seeks $ 309 Billions From US Firm Over Ruby Sales"

" \r\n\r\n Malawi Seeks $ 309 Billions From US Firm Over Ruby Sales \r\n Malawi\u2019s \u00a0government is demanding the astonishing sum of US$309 billion in unpaid taxes and royalties from a US-based\u00a0 gemstone \u00a0company for rubies exported from the southern African state over the last 10 years, its attorney-general has told the BBC. \r\n Columbia Gem House, a family-owned business which says that it upholds fair trade practices, dismissed the claim as \u201cbaseless and defamatory\u201d. \r\n The government is also demanding US$4billion from French gas giant TotalEnergies in unpaid revenue from an oil storage deal, and US$9.5m from Turkish tobacco firm Star Agritech, said Attorney General Thabo Chakaka Nyirenda. \r\n TotalEnergies declined to comment while Star Agritech denied owing any money. \r\n The amount being claimed from the three multinationals is nearly 300 times Malawi\u2019s national debt of around US$1.2billion, and 22 times its Gross Domestic Product (GDP) of $14bn. \r\n Malawi was forced to take a US$174million bailout from the International Monetary Fund (IMF) last year after running into financial trouble. \r\n Speaking to the\u00a0 BBC Focus on Africa podcast , Nyirenda said that Columbia Gem House had been under-reporting the value of rubies it had exported from Malawi. \r\n He added that \u201csome of the evidence that we\u2019ll be using comes from Columbia Gem House itself, such as declarations they have made in the US, and what they have reported on their website, which they have now deleted\u201d. \r\n \u201cThe amount is not just [for] one year, it goes over 10 years back. It also includes the interest,\u201d Nyirenda said. \r\n Columbia Gem House said that the government\u2019s sums do not add up. \r\n The US$309 billion claim \u201cimplies Malawi has somehow produced and exported trillions of dollars\u2019 worth of coloured gemstones\u201d, the firm said in a statement. \r\n \u201cThey haven\u2019t done this by any stretch of the imagination,\u201d it added. \r\n Columbia Gem House said it does not operate in Malawi, but buys its gemstones from Nyala Mines, a Malawian-owned company in which the government has a 10% stake. \r\n However, Nyirenda told the BBC that as a minority shareholder, the government was not involved in the day-to-day management of the company, and \u201cthe name of Nyala Mines had been changed to disguise its ownership\u201d. \r\n An attempt by the US embassy in Malawi to settle the dispute fell through when the attorney general failed to attend an online meeting, which he put down to \u201ctechnical challenges\u201d. \r\n Mining contributes only 1% to Malawi\u2019s GDP, although the government has announced plans to scale this up in the next few years. \r\n Malawian economist Wisdom Mgomezulu said the government may be making the claims now because of its financial difficulties. \r\n \u201cThey\u2019re looking at all potential sources of income, but if you look at the claim versus the size of the economy, it\u2019s just way too much,\u201d he told the BBC. \r\n The dispute with TotalEnergies is rooted in a deal Malawi entered with it in 2001, according to Nyirenda. \r\n The French multinational was to provide fuel to Malawi and was to get tax incentives in return, he said. \r\n The profits from the arrangement were to have been shared equally but TotalEnergies \u201conly paid for two years and stopped paying in 2006\u201d, Nyirenda alleged. \r\n The government has since taken the company to court in Malawi, and Nyirenda said the government wants it to pay US$4 billion to settle the matter. \r\n \r\n\r\n \r\n \r\n \r\n \r\n \r\n \r\n \r\n \r\n \r\n \r\n <img class=\"sc-a34861b-0 efFcac\" src=\"https:\/\/ichef.bbci.co.uk\/news\/480\/cpsprodpb\/6561\/live\/a9f1bec0-bc9b-11ef-aff0-072ce821b6ab.jpg.webp\" sizes=\"(min-width: 1280px) 50vw, (min-width: 1008px) 66vw, 96vw\" srcset=\"https:\/\/ichef.bbci.co.uk\/news\/240\/cpsprodpb\/6561\/live\/a9f1bec0-bc9b-11ef-aff0-072ce821b6ab.jpg.webp 240w,https:\/\/ichef.bbci.co.uk\/news\/320\/cpsprodpb\/6561\/live\/a9f1bec0-bc9b-11ef-aff0-072ce821b6ab.jpg.webp 320w,https:\/\/ichef.bbci.co.uk\/news\/480\/cpsprodpb\/6561\/live\/a9f1bec0-bc9b-11ef-aff0-072ce821b6ab.jpg.webp 480w,https:\/\/ichef.bbci.co.uk\/news\/640\/cpsprodpb\/6561\/live\/a9f1bec0-bc9b-11ef-aff0-072ce821b6ab.jpg.webp 640w,https:\/\/ichef.bbci.co.uk\/news\/800\/cpsprodpb\/6561\/live\/a9f1bec0-bc9b-11ef-aff0-072ce821b6ab.jpg.webp 800w,https:\/\/ichef.bbci.co.uk\/news\/1024\/cpsprodpb\/6561\/live\/a9f1bec0-bc9b-11ef-aff0-072ce821b6ab.jpg.webp 1024w,https:\/\/ichef.bbci.co.uk\/news\/1536\/cpsprodpb\/6561\/live\/a9f1bec0-bc9b-11ef-aff0-072ce821b6ab.jpg.webp 1536w\" alt=\"AFP A tobacco farmer loads freshly harvested green tobacco leaves into an ox-driven cart at Nambuma in Dowa District, central Malawi, 8 April 2022\" \/> AFP \r\n \r\n \r\n \r\n \r\n Malawi is a major producer of tobacco \r\n \r\n As for the dispute with Star Agritech International, the government accuses it of buying three million tonnes of tobacco worth US$15m from Malawi through three subsidiaries \u2013 registered in Mauritius, Hong Kong, and South Africa \u2013 in 2013, but failing to pay for it. \r\n Malawi Leaf Company, the state-owned enterprise that sold the tobacco, took legal action in Hong Kong and won the case, Nyirenda said. \r\n \u201cOver $9.5m was proven in a Hong Kong court,\u201d he said, adding that Malawi wanted Star Agritech International to pay the amount. \r\n He further alleged that the Hong Kong subsidiary of Star Agritech International was established \u201cfor the sole purpose of obtaining the tobacco from Malawi\u201d. \r\n In response, Star Agritech International told the BBC that it purchased tobacco worth US$5million \u2013 not US$15 million as Malawi claims. \r\n \u201cThis is completely wrong and is representative of the type of problems businesses face in dealing in Africa,\u201d said the company\u2019s boss, Iqbal Lambat. \r\n Mr Lambat further claimed that the tobacco shipped was substandard. \r\n \u201cThis transaction experienced difficulties as the tobaccos were not one uniform grade but a combination of leftover scrappy tobaccos,\u201d he said. \r\n Malawi is not the only African country that is going after money they say multinational companies owe them. \r\n Last week Mali\u2019s military junta issued an international arrest warrant for Canadian mining firm Barrick Gold\u2019s chief executive officer, alleging the company owes the West African state $500m. \r\n Barrick has responded by threatening to suspend operations in Mali, adding that \u201clocal operating conditions have deteriorated significantly with employees imprisoned without cause and gold shipments blocked\u201d. \r\n And in November the junta released the head and two employees of an Australian mining company, Resolute Mining, after a US$160 million tax dispute was settled. \r\n The firm paid half the money upfront, with a promise to pay the other half in the coming months. \r\n\r\n "

"Malawi Seeks $ 309 Billions From US Firm Over Ruby Sales"

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