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Columbia Gem House demanded USD 309bn for rubies exported from Malawi over the last 10 years. French gas giant TotalEnergies was hit with USD 4bn in unpaid revenue from an oil storage deal, while USD 9.5m was demanded from Turkish tobacco firm Star Agritech.
Malawi’s government is demanding hefty sums in unpaid taxes and royalties from multinationals. A sum of USD 309bn was demanded for rubies exported from Malawi over the last 10 years from Columbia Gem House. The US-based gemstone company is a family-owned business. Columbia Gem House has been alleged of under-reporting the value of rubies it had exported from Malawi. The Attorney General reported that the claims have been based on evidence from Columbia Gem House itself, such as declarations they have made in the US, and reports on their website. Disputing the statement, Columbia House said that the USD 309bn claim did not make sense and that it indicated that Malawi has produced and exported trillions of dollars worth of gemstones.
Columbia Gem House said it does not have a presence in Malawi but sources its gemstones from Nyala Mines, a Malawian-owned company that has a 10% stake in the government.
French gas giant TotalEnergies was slammed with USD 4bn from unpaid revenue from an oil storage deal, while USD 9.5m is demanded from Turkish tobacco firm Star Agritech. The multinationals have refuted the charges.
Malawi signed a deal with TotalEnergies in 2001. Under the Agreement, the French multinational was to provide fuel to Malawi and was to get tax incentives in return. The allegation by the Malawian side is that the profits from the arrangement were to have been shared equally and were paid for only two years. The government wants USD 4bn to settle the matter.
In the case of Star Agritech International, the government accuses it of buying three million tonnes of tobacco worth USD 15m from Malawi through three subsidiaries – registered in Mauritius, Hong Kong, and South Africa – in 2013, without paying for it. According to the spokesperson, Malawi Leaf Company, the state-owned enterprise that sold the tobacco won the case in Hong Kong with a claim of over $9.5m. Malawi wanted Star Agritech International to pay the amount.
The demand from the three multinationals amounts to nearly 300 times Malawi’s national debt of around USD 1.2bn, and 22 times its Gross Domestic Product (GDP) of USD 14bn. The amount charged is for a period of 10 years including interest.
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Malawi has been facing a deep financial crisis. Last year, it took a USD 174m bailout from the International Monetary Fund (IMF) to tide over the crisis. Star Agritech International stated that it purchased tobacco worth USD 5m – not USD 15m and the quality was substandard.
