African Minerals’ $10M payment needs no fanfare

African Minerals’ $10M payment needs no fanfare

By Theophilus S. Gbenda (Moe-Fire)

Much fanfare has been made over the ten million dollars expatriate tax paid to the Government of Sierra Leone, Wednesday 23^rd February 2011, by African Minerals Limited. And of course, many view African Minerals as a generous, benevolent force for good in our country – that much-touted cheque being handed out in the glare of photographers’ flashing lights was sure worth ten million dollars in free advertising for our friends who run African Minerals, including Romanian native Frank Timis, with his very chequered history that includes two convictions for heroin possession in his adopted country of Australia.

Interestingly, as the big announcement about the ten million dollars expatriate tax was being flogged mercilessly from Ministry to Office of the President to Ministry again, with photo ops at every stop along the way, our Parliament was ratifying an agreement for the same Frank Timis and another of his companies, African Petroleum, for an offshore oil lease. Coincidence?

Apart from the fact that the said payment is far from being a free will offer (or at least we must HOPE it’s not), the manner in which it was made has raised many questions.

If only not to attract undue publicity, there was absolutely no reason why the cheque first had to go to the Minister of Mineral Resources and then to His Excellency the President at State House and onward to the Minister of Finance and Economic Development. The next moment, the story was all over the place including the state broadcaster and on the company’s unreliable website. You’d think this is charity, and not taxes owed to the Government of Sierra Leone which has been pushing its own impoverished population to pay taxes including the Goods and Services Tax (GST) that is imposed on even the poorest of the poor when they purchase anything but basic foodstuffs. How many Sierra Leoneans get their photos taken and given publicity when they obey the laws of the land and pay their taxes? The answer, of course, is none.   

The right thing to have done was to quietly make the payment to the National Revenue Authority (NRA). What is important in this case is for the company to fulfill its obligation to the state by timely effecting the payment in question and such others, and not the gratuitous publicity. It’s like going to pay my electricity bill. Why does anyone need to know when it’s clear that if I fail to pay I’ll be cut off?

There is an adage that says when a dirty man is trying to make himself look clean, he forces the public to take notice of all his supposed good works. African Minerals is good at this kind of window-dressing. Unfortunately, many of our hungry newspapers and journalists oblige Mr. Timis and African Minerals at every turn – indeed, it seems in recent months as if our newspapers and many of our journalists who enjoy the payment they receive for printing African Minerals propaganda and job adverts, would have us believe that he and his company - here to exploit our mineral wealth - are some kinds of Latter Day Saints. Companies and the individuals who run them have one bottom line, they’re here to make profits, big as they possibly can, and make no mistake about it – they are anything but saints and their business is anything but charity.

Take a look at Mr. Timis’ very questionable reputation. Those who interview him say he uses obscenities in great number, and in London he is known as “The Gusher”. His previous forays into the oil business earned him headlines calling him a “rogue oil man”.

London Evening Standard reported that in 2005, Timis claimed that Regal Petroleum, the London-based oil company he was running, had made a major find off Greece. In fact, the discovery proved to be commercially unviable. Too late — investors who believed in Regal lost their shirts as the share price plunged. No problem, apparently, for Mr. Timis. This year his ill-gotten wealth earned him a place for the first time on the Forbes list of billionaires worldwide – his wealth, accumulated from his ventures in countries like Sierra Leone and Romania – makes him the 1057^th richest person on this planet of about 6.5 billion people. You don’t get to the Forbes List by being a saint.

Late last year, Regal was fined £600,000 by the Alternative Investment Market (AIM) - its largest ever penalty. AIM found that the company “on 11 separate occasions … failed to take reasonable care to ensure its announcements were not misleading, false or deceptive, and did not omit material information.”

In late 2007, the Toronto Stock Exchange determined that Timis was an unsuitable person to act as a director, officer or major shareholder of a listed company. And now, on the heels of our diamond fields and our iron ore, Mr. Timis is now after our oil. His African Petroleum company which our Parliament has granted an offshore lease, was refused twice for listing in the Australian Stock Exchange for reasons not unconnected with his criminal conducts.

In our country, though, we fall on our knees in gratitude if he just pays a few taxes owed. The unfortunate part of it all is that in the process of attracting undue publicity, no less a person than His Excellency the President of the Republic of Sierra Leone, Dr. Ernest Bai Koroma, is brought in the picture with his wonderful trademark smiles, which to my mind, should be reserved for truly happy occasions and real good deeds. Not just because a fabulously rich corporation shows up and pay its tax bill.

 

African Minerals certainly won out on this one. Our elected president, who is supposed to answer to us, the Sierra Leonean taxpayers who are never thanked for paying our taxes, remarked while receiving the cheque that “This money will go a long way towards implementing Agenda for Change programmes which would benefit citizens of this country. Everybody is happy with what is presently happening in the country with regards government’s implemented projects”. The president went on to state that development is taking place everywhere, adding that “Even if you are blind you will feel it.” What a mockery of himself?

Above all, President Koroma commended African Minerals for working within the framework of the law by honouring its obligations, as if it were a special favour being bestowed on our country and citizenry by Mr. Timis, rather than a normal legal obligation. Earlier on while presenting the cheque to the president, Mines Minister Minkialu Mansaray, referred to African Minerals as a “brighter example”. Of what, may we ask?

What is worthy to note is that for all the unnecessary noise over the ten million dollars, the tax in question represents just a fraction of what should actually come to the state. Don’t forget that companies such as African Minerals enjoy special tax concessions amounting to millions and millions of dollars, which otherwise could be used to address urgent social needs. The company, like other foreign ‘investors’ is exempted from paying import duty and the Goods and Services Tax (GST) amongst others, such as long tax holidays that allow them to pay no corporate taxes for up to ten years. The question is, how many of us, struggling to make ends meet, enjoy such tax breaks? The answer again is none.

Apart from the illegal tax concessions, it is also worthy to note that African Minerals for example has the power to deduct monies spent by way of operational cost, from the percentage that should come to the state.

While the misplaced fanfare is still blowing in the airwaves, the community residents who are directly affected by the operations of African Minerals continue to leak their wounds following their manhandling by misguided police and military officers over allegations that they burnt down a drilling machine worth two million dollars belonging to the company. No one has set eyes on the said machine, which implies that the truth in the circumstances is again, subject to question.

It is almost certain that not a single cent from the much drummed about $10M expatriate tax paid will filter down to the deprived communities where the company is operational. What is even painful is for the people out there to hear about the payment and not even smell it.

More likely, it will go to fill the void in government coffers, caused largely by overspending and the massive deficit that has been incurred thus far.  Ask the IMF – they may not tell you but they know. 

God save us!