Now Reading
Prospect Resources in tax fiddle storm

Prospect Resources in tax fiddle storm

Prospect Resources 3

AUSTRALIA Stock Exchange listed miner, Prospect Lithium Zimbabwe (PLZ) allegedly attempted to evade taxes in a deal clinched to transfer Arcadia lithium fields into its name about four years ago, multiple court actions and internal correspondence showed last week.

Mandizha & Company, a law firm representing Fredrick Mubaira, who owns part of claims on which PLZ is developing Arcadia Mine near Harare, alleged in High Court papers submitted on April 11, 2022, that the firm was determined to evade duties due to the state at every twist and turn.

After PLZ announced substantial lithium finds on a block where Mubaira and another Zimbabwean were mining gold, the parties agreed to evaluate the value of the resource. After that a settlement would be arranged, High Court papers said.

PLZ trades its stock on one of the world’s most advanced stock exchanges, where high levels of transparency and disclosures are demanded. The legal action gives a window into the extent to which PLZ has used its “economic might” to cow a “low literate Zimbabwean” into accepting a meager settlement for a claim that it sold for US$378 million to Chinese tycoons in December last year, according to Mandizha & Company. Mubaira’s attorneys said after “cajoling” their client into accepting US$55 000 for the multi-million lithium asset, PLZ persuade him to present the agreed amount as US$5 000 to the ministry of Mines and Mining Development. The documents expose how PLZ has avoided paying the US$55 000, buying the house and car as agreed, settling only ZW$8 400 (US$56) so far for Mubaira’s portion of the Arcadia resource, one of the biggest in Africa.

“In using the said modus operandi Mr Nyasowa made it unequivocally plain to our client that they had to misrepresent the price to the ministry, and therefore government, to enable PLZ to avoid paying the actual and real duty arising from the transaction,” Mandizha & Company said in the High Court papers.

They have also send a copy of the High Court papers to Shanghai Stock Exchange listed Chinese giant, Zhejiang Hoayou Cobalt Limited, which is currently securing requisite multiple approvals to take over the claims, after agreeing to pout US$378 million to take over 87% shareholding in PLZ.

“The conduct of Mr Nyasowa, and by extension PLZ, is fraudulent in various respects, not least, illegally avoiding paying the correct duty to government,” the lawyers stated in the court papers.

“The same conduct reported to, and investigated by, the correct authorities, could be found to be criminal.

“He also, cajoled, forced and convinced our client that the US$55 000 was of no concern to the ministry since our client would enter into a substantive contract with PLZ and its counter parties in due course. “Deploying economic duress and taking advantage of our client’s low literacy and low bargaining power, Mr Greaves (of PLZ) coerced and cajoled our client into signing the said “agreement”.

“This agreement is a fraud, not least because the US$5 000 (as stated in papers to the ministry) was not paid, and has not been paid to our client, nor was it even the contract sum,” the lawyers said.

They went further to state: “He (Nyasowa) refused to give (our) client a copy assuring him that he would get one once all directors had signed. Using fraud, misrepresentation and the same tactics…all of which are reminiscent of the infamous Rudd Concession of 1888, Mr Nyasowa directed our client to lie on the transfer forms that the purchase price was US$5 000”.

Mubaira’s High Court battle to repossess the gold and lithium fields further exposes shocking laxity in mineral claims administration in Zimbabwe, where wrangles have swamped the legal system. He is also suing the Ministry of Mines and Mining Development, the custodian of the country’s mineral resources.

See Also
kuvimba mining house (kmh)

The Arcadia asset holds sway on the global lithium industry due to high grade ore, whose first samples have attracted international attention.

Lithium is a key raw material in the production of electric vehicle batteries. PLZ and the Ministry of Mines and Mining Development had not filed their responses by Wednesday.

 

The Independent 

Scroll To Top
error: Content is protected !!