Glencore rocked by tax complaint ahead of London stock market float
A group of five non-governmental organisations lodged a complaint with the Organisation for Economic Co-operation and Development (OECD), citing 'financial and accounting manipulations' by Glencore's Zambian subsidiary Mopani Copper Mines (MCM) [jointly owned with First Quantum Minerals, Zambia Consolidated Copper Mines]. The complaint alleges that MCM failed to explain a £234 million increase in its operating costs during 2007 and reported 'stunningly low' volumes of cobalt extraction compared to similar mines in the region...The NGOs said: 'The result of those various processes was to lower by several hundreds of million dollars MCM's net income for the 2003-2008 period, herby substantially lightening the company's tax burden.' Glencore denied any wrongdoing saying the report was 'based on broad and flawed statistical analysis and assumptions' and insisting that 'no transfer pricing has taken place'. It said the report did not take into account that Mopani produces copper on behalf of third parties, although it did not explain how this would counter the NGOs' claims.