Glencore denies tax avoidance accusations

A SWISS COMMODITIES company has been accused of evading tax in Zambia just as it is preparing to list in London and Hong Kong.

Glencore denied complaints made by five non-governmental organisations to the Organisation for Eonomic Co-operation and Development, the Daily Mail reported.

They said the Swiss company had been involved in transfer pricing with one of its subsidaries, Mopani Copper Mines (MCM). They have also claimed MCM failed to explain a £234m 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.'

The Mail said that the complaint was based on a leaked report by Grant Thornton, prepared for the Zambian revenue authorities.

Glencore has said that the report was "based on broad and flawed statistical analysis and assumptions' and insisting that 'no transfer pricing has taken place".

The company is preparing to announce its intention to list in London and Hong Kong, in a float valuing the company at around £37bn.