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Lonmin denies tax evasion claims

Johannesburg - Lonmin [JSE:LON] on Tuesday denied allegations it was evading tax, after calls that the company should be investigated.

Recent allegations by the Alternative Information and Development Centre (AIDC) and a Mail & Guardian story of September 19 about Lonmin's historic tax affairs, were "false and misleading", it said in a statement.

"Lonmin pays tax fully and properly in all jurisdictions, in which it operates."

The allegations by AIDC senior economist, Dirk Forslund, were "false and mischievous".

"Lonmin's financials have always been properly audited and the company has always met with South African tax compliance requirements," it said.

The company refuted claims about its empowerment partner, Incwala Resources.

The company structures referred to in the Mail & Guardian article were in place before Shanduka Resources became a shareholder in Incwala and at no point did Shanduka resist changes to these structures.

Lonmin said the publication failed to reflect its lengthy responses which had led to an "unbalanced and distorted article".

SA Revenue Service (Sars) spokesman Adrian Lackay said he would not comment.

"By law, we are not allowed to make public statements on the affairs of taxpayers," he said.

On Thursday, the AIDC said that the transfer of over R2.3bn in fees from Lonmin to two of its subsidiaries, with one located in the tax haven of Bermuda, should be investigated.

"Lonmin, just for the years 2008 to 2012, transferred in commission fees US160 million (R1.2 billion) to a subsidiary, Western Metals Sales Limited based in Bermuda," Forslund said in a statement.

"A further $155m (R1.2bn) was paid in management fees to Lonmin Management Services."

The AIDC called on Sars and government to investigate Lonmin's financial operations, other transnational mining corporations, transfer pricing, and alleged illicit financial flows.

On Friday, the Economic Freedom Fighters echoed the AIDC's call for Sars to probe Lonmin.

Forslund alleged the amounts were shifted from Lonmin's South African operations so as not to be used for meeting wage demands, social labour commitments, or be included in taxable income.

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