Harare – Impala Platinum [JSE:IMP] has been sucked into the Panama Papers debacle after leaked documents showed its unit, Zimplats, used an offshore company to pay workers’ salaries in Zimbabwe. The precious metals miner denied this on Monday.
The Panama Papers are a large volume of documents detailing how world leaders, companies and celebrities undertook to avoid tax and to launder funds through illicit financial flows and offshore havens.
The Mossack Fonseca’s leaked documents allege that Zimplats, in which South Africa’s Implats is a majority shareholder, used an offshore company, HR Consultancy, to pay employees in Zimbabwe.
More than seven other companies, whose finer details are still coming up, as well as prominent business people have also been named in the documents.
Implats however denied that it engaged the services of the offshore company. However, according to a spokesperson at Implats, the company has been receiving queries regarding the issue.
“We are not aware of this company – HR Consultancy. All salaries at Zimplats are funded and paid by the company internally and overseen by the Board Remuneration Committee,” Johan Theron, spokesperson for the company said in a statement.
Implats is among the major mining companies in the country that also include Anglo Platinum, Aquarius Platinum and Metallon Gold. Government officials say the mining sector is not contributing much into state coffers despite the mining companies’ complaints of high taxation through excessive royalties and fees.
Although government officials were not immediately available for comment, sources in Harare said the tax arm, Zimra was likely to act on this information. Zimbabwe said earlier this year it would monitor corporate account activity to deal with externalisation of scarce foreign currency.
“We have responded to some calls today that we don’t know this company and that Zimbabwe Platinum Mines has never dealt with it,” Theron further stated.
The mineral rich southern African country is battling a biting liquidity crunch that has seen some banks run out of cash at ATMs. Other banks have since started to limit cash withdrawals.
The government has previously accused the international miners of not declaring all minerals they are mining in the country and had moved in to force platinum miners to construct base metal smelters inside the country.
All foreign owned mining companies are also required to give away majority shares into the hands of black Zimbabwean groups. Gold produced in the country is sold through Fidelity Printers, a unit of the Reserve Bank of Zimbabwe as the country intensifies its mineral beneficiation policy.