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Business News of Thursday, 23 May 2019

Source: citinewsroom.com

Chamber of Mines challenges $14.1m financial loss claim in mining sector

The Ghana Chamber of Mines has challenged findings by iWatch Africa claiming that the failure of six mining companies to pay dividends deprived the state of $14,148,373, as at October 2018.

The CEO of Ghana Chamber of Mines, Sulemana Koney said he didn’t think the iWatch Africa report was based on holistic information.

“I dare say that whatever studies have been done, including by the Auditor General, I believe it will not be a final report,” he retorted on the Citi Breakfast Show.

He also said it was unlikely the regulators of the industry, like the Minerals Commission, approved the documents used for the iWatch Africa investigation.

“There are regulators within this industry and I don’t believe that these have been actually shared with them. Otherwise, they would have pointed out the gaps in this report,” Mr. Koney surmised.

Mr. Koney also argued that the absence of dividends could be a decision had been made not to declare dividends; a decision which would affect all shareholders.

“The assumptions that our government is shortchanged cannot be true at all so that confusion needs to be clarified,” he explained.

“In all businesses, you decided how you want to grow the business so it is not just about making profits and sharing the profits because you could take a strategic decision… and one of them is to reinvest into the business to grow the business.”

The companies cited by the iWatch Africa investigation were Chirano, Adamus, Gold Fields Abosso, Perseus Mining, Ghana Manganese and Ghana Bauxite.

Ghana has a 10 percent interest in all mining companies registered under the Companies Act of 1963 and these companies are to submit their returns to the Registrar General’s Department and the Minerals Commission annually.

In addition, they are supposed to conduct annual self-assessments for submission to the Ghana Revenue Authority.

Representation on the board

iWatch Africa’s report also indicated that the government had not selected representatives for the boards of some of these mining firms.

In response, Mr. Koney said he was surprised and that such findings “just can’t be true.”

“We see these reports from these companies. Go to minerals commission and other regulators and you will see the representation of government on these boards.”

But Mr. Koney’s rebuttal to these claims was not buttressed with the names of the various board members.

“I can’ t tell you off hand but it is not my place to tell you. Go to Minerals Commission, if you go to mineral commissions or if you go to the sector ministry, you will have the information,” he said.

iWatch Africa’s findings

iWatch Africa said its review of the financial statements of these mining companies failed to transfer dividend attributable to the government despite,

iWatch Africa also contended that the companies failed to obtain the needed prior approval from the Ministry of Finance for the plough back of the profit to reap the dividends.

The Auditor General in his 2018 report revealed the absence of government representation on the boards of these mining companies, despite government ownership of 10 percent carried interest.

According to the Auditor General, this “inhibits oversight functions and possible cause for cost manipulation by the mining companies.”