Malawi: Govt. threatens to institute criminal proceedings on money laundering & tax evasion charges against Columbia Gen House if it fails to pay over $ 3 billion in unpaid revenue, incl. company response
‘Malawi claims US$309 billion from US company’ 30 July 2022
Malawi Government is demanding US$309 billion (about K310 trillion) from Columbia Gem House in unpaid revenue on ruby and sapphire which the company’s subsidiary Nyala Mines Limited extracted from Chimwadzulu mine in Ntcheu. Attorney General Thabo Chakaka Nyirenda has written the company a letter dated July 26, 2022 demanding the said sum. Chimwadzulu Hill in Ntcheu has deposits of ruby said to be 50 times rarer than diamonds. In 1994, Malawi Government awarded an exploration licence to Mineral Exploration Pvty Limited and after expiration of the 10 year licence, Malawi only issued a two-year licence as the Government wanted local participation in the mine.
Citing the US Department of Interior, Nyirenda said Nyala exported 150 kilograms of ruby and rare padparascha and 300 kilograms of sapphire every year between 2008 and 2013 but only paid K604,000 in tax to Malawi. “Going by Nyala’s own declared price of untreated ruby of US$25,000 per carat, this yields the sum of 9 billion US dollars worth of sale revenue per year from ruby alone and 15 billion US dollars worth of sales revenue per year from sapphire. “The total net tax revenue that had been evaded by Nyala Mines Limited amounts to US$309.6 billion,” Nyirenda said.
… The Attorney General added that Nyala dishonestly exported ruby and sapphire from Malawi and that the company has been unjustly enriched by failure to pay appropriate royalties and taxes in Malawi thus committing tax evasion and money laundering of which Malawi has a right to institute criminal proceedings. Nyirenda then demanded US$309.6 million plus interest as well as 15 percent collection fees. “The state of Malawi reserves the right to institute criminal proceedings on money laundering and tax evasion charges against you and all persons involved in the evasion should you fail to pay the said sums,” said Nyirenda in the letter addressed to chief executive officer of Columbia Gem House. He warned that Malawi will commence civil proceedings if the company fails to pay the said sum and fails to indicate how the money will be paid.