United Manganese of Kalahari, Russian ANC Links, Huge Tax Bill

Alocal mining company still hurting from a major court loss in its battle with SouthAfrican Revenue Service (Sars) Commissioner Edward Kieswetter is tight-lipped about whether it will fight on or fold and settle with the tax agency

With reference to your queries regarding the Sars litigation, kindly note that United Manganese of Kalahari (UMK) does not have any comment to make at this point in time,” UMK company secretary as well as its legal and compliance officer, Ori Phayane told Sunday World in an email reply

Kieswetter has smacked UMK, which mines manganese in the

Northern Cape, with a R351million extra tax bill, which the company has so far fought tooth and nail.

UMK is partly owned by Russian oligarch and billionaire Viktor Vekselberg, who lives in Moscow, and theANC’s investment vehicle, Chancellor House, also has a stake in the company The US government has issued sanctions against Vekselberg. The events that led to the extra tax bill started in March 2017 when Sars issued a letter to UMK and indicated that it would audit the company for the 2011, 2012 and 2013 tax years. As a result, in February 2020, UMK instituted legal action against Sars in the North Gauteng High Court in Pretoria to set aside the extra assessments. However, the high court dismissed that application and ruled that the tax court should adjudicate the dispute.

Forbes estimates that at the end of March, he was worth $6.7bn (R120bn), which made him the world’s 360th most wealthy person.

UMK then applied to the Supreme Court ofAppeal (SCA) to set aside the high court’s ruling.Three SCA judges heard the matter on 22 February

Then, in January 2020, Sars issued UMK with an assessment letter stating that it would increase the company’s tax bill by R351-million.

However, this month, those judges found that the SCAlacks jurisdiction to review the matter.

“It follows that the appeal must fail, and it is accordingly dismissed with costs,” the SCA judges ruled.

UMK will have to move swiftly if it wants to lodge an appeal against the SCAruling.

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Continued from page established the company in 2005, and according to its website, it is SouthAfrica’s fourth-largest manganese producer.

Vekselberg holds his interest in UMK via a Cyprus-registered entity called NewAfrican Manganese Investments (Nami), which owns a 49% stake in UMK, according to amaBhungane.

Majestic SilverTrading is a consortium that includes Chancellor House, PitsaYa Setshaba Holdings and a Kalahari community trust, and owns 51% of UMK. Chancellor House managing director

UMK has been a significant donor to theANC, given its strong political links to the party.

Mogopodi Mokoena is the chair of UMK’s board. According to the Independent Electoral Commission’s (IEC) party funding disclosure report issued in late February,

UMK donated R30-million to theANC in the IEC’s 2023 financial year, comprising a declared donation of R15million and R15-million inkind donation.

“The [in-kind] donation from UMK was a payment made on behalf of the party to the Johannesburg Expo Centre for theANC elective conference of December 2022,” the IEC noted.

During the IEC’s 2022 financial year, UMK made significant donations to theANC, the IEC added.

The US Department ofTreasury sanctioned Vekselberg inApril 2018 and again in March last year after Russia invaded Ukraine.

However, Nami’s shareholding in UMK of under 50% means it will not get sanctioned by the US government. US laws state that a company in which a sanctioned individual owns over 50% is liable for sanctions. Spanish police and the FBI in April 2022 seized Vekselberg’s $90-million superyachtTango in Spain.