Chief Government Spokesperson Dora Siliya says KCM owes government K3 billion in taxes whilst the Zambia Revenue Authority only owes KCM K1.9 billion in VAT Refunds.
And Siliya says there are a lot of potential investors showing interest in KCM.
Speaking at a press briefing, Wednesday, Siliya, who is also Information Minister, said KCM owed the people of Zambia much more than it was demanding in VAT Refunds.
“I have read in the papers today that Vedanta is saying their points of departure are three (a) that they were affected by VAT refund and it is very surprising for us because I can confirm to you that Vedanta in terms of its tax assessment owed to government is about K3.01 billion. These are taxes that Vedanta owes the people of Zambia. Yes, government owes KCM Vedanta in VAT claims of K1.9 billion. So while they owe government K3.01 billion, government only owes K1.9 billion and out of this K1.9 billion, K1.4 billion has been audited. It is [only] the pending K431 million which is waiting to be audited. Do the maths, who owes who more? And that is why the government is saying ‘how can we have liquidity problems when our own asset is supposed to be used for our own benefits. So Vedanta owes government more than what government owes the company,” Siliya said.
And Siliya said the liquidation of KCM was not as a result of insolvency but government’s desire to part ways with a bad business partner, further boasting that a lot of investors were interested in the mine.
“Even if ZCCM-IH only holds 20.6 per cent of shares in KCM, it holds those shares on behalf of 17 million Zambians. And so the interest by government is very large. And this liquidation has not been prompted by creditors, it has been prompted by one of the partners in KCM and in this case ZCCM-IH on behalf of the Zambian people to say ‘because we are not making profit, because we suffer a threat of insolvency, because what we agreed when we got into business is not happening, we think it is time that we wind up this business so that we can go our separate ways.’ This liquidation is not insolvent liquidation. The issue that is important is that the asset continues to be for the people of Zambia, the workers are protected during this period and suppliers are protected during this period so that we wind down this relationship between the people of Zambia and Vedanta so that we can go our separate ways and see how now best shall we manage this asset for the people of Zambia?” Siliya asked.
“KCM liquidation is dissolving of the partnership between ZCCM-IH and Vedanta while the asset continues to operate so that worker/supplier obligations continue to be met as a going concern through Liquidator. Much interest [is] already being shown by other potential investors.”
Asked to comment on fears that other mining companies would leave Zambia following the liquidation of KCM, Siliya said other companies would still find it fit to invest in the country.
“When Vedanta came to Zambia in 2002, Anglo mining was leaving but Vedanta still had confidence to come. Even now the government is inundated with people who are very interested in KCM and that is why we are questioning that if people can see the opportunity to make business in this mine, why aren’t the Zambians profiting? Why are we owed K3.01 billion in tax assessment? Because the Zambians need that money for roads and not just on the Copperbelt [but] everywhere else, Zambians need that money for drugs in hospitals, Zambians need that money for soft loans to ensure that young people get into businesses. So for me I think that trying to hold us to ransom and trying to portray a picture in the international media that Zambia is not a sure country for investment is wrong,” she said.
And asked to give an opinion on calls for all serving and former government officials to undergo a lifestyle audit, Siliya said the country had enough laws to fight corruption.
“We must believe in our institutions. We have the Anti-Corruption Commission, we have the Drug Enforcement Commission, we have courts, we have police, we have laws that provide for whistle blowers, we have the Financial Intelligence Unit, we have systems that work to be able to address these issues. And it’s not just people in government, not just politicians, not just civil servants [but] all Zambians and everybody within the jurisdiction of Zambia. We have laws that work. And the fight against corruption is a very important fight but in this country it has been politicised so that even when a good job is done, people will not want to believe a good job, they only want to believe in rumours. The Auditor General’s Office has done a great job. Their report used to be so big but it keeps going down, the Ministry of Finance has put in place the Public Finance Management Act, we have gone electronic in terms of public procurement,” said Siliya.
“So it’s not only in government, or civil servants but even in private sector there are also corrupt people there. We should entrust those that have been given to do this job and in Zambia we should be extremely proud because in Zambia, nobody has even been left off the hook. We have seen presidents accused, we have seen civil servants accused, we have seen people from the defence wing accused, we have seen journalists accused, we have seen people from the private sector accused. Clearly we must be doing something right.”