DRC’s MMG Kinsevere Face Fraud Allegations Over Tax & Labor Reporting

| | ,

A Katanga-based mining firm, MMG Kinsevere, has raised concern of fraudulent activity in its reporting to Democratic Republic of Congo government authorities ranging from inaccurate labor, tax statistics and transparent business practices.

In the proceedings before the Commercial Court of Lubumbashi in a matter against MCK SARL, MMG Kinsevere SARL claimed it employed 3, 000 employees and any action against it will jeorpardize their employment.

Records before government agencies show MMG Kinsevere has employed far less than 3, 000 and therefore raises suspicion of falsifying court doicuments which is subject to criminal prosecution.

ACAJ, an NGO that oversees activities of mining companies in the Democratic Republic of Congo, has questioned the discrepancy as any false statement under oath in court amounts to perjury.

While MMG Kinsevere claims to have directly provided jobs to 3, 000 Congolese, only 791 as of January 2020 are listed as tax payers while the number of contributions made to the National Social Security Fund (CNSS) is at 920 employees as of March 2020.

Ironically, the company’s financial statements collected by D&B Hoovers at https://www.dnb.com/business-directory/company-profiles.mmg_kinsevere_sarl shows that MMG Kinsevere only employees 50 personnel and has an estimated sales of $6.7 million.

“MMG, which does not stop claiming that it conducts its business in accordance with the highest ethical standards, cannot ignore the legal obligations arising from the number of people it employs directly, especially vis-à-vis to the tax authorities and social legislation,” the press release read.

Georges Kapiamba, President of ACAJ, says the discrepancies provided by MMG Kinsevere in court and other government agencies as well as international bodies has brought into question the intergrity of the company management.

Kapiamba states that MMG Kinsevere’s claim should be treated with a pinch of salt because its alleged distorted facts and in some instances confessions have the potential to trigger criminal proceedings.

“ACAJ reaffirms its firm determination to work for the strengthening of the rule of law, in particular by reporting wrondoings with the highest possible standards, and will never allow it to be accused of distorted facts based on false statements or even confessions of fraud to the law which should, moreover, trigger, as per law, criminal process”, he concluded.

WOULD MMG HAVE MADE A FALSE STATEMENT OR IS IT INVOLVED IN TAX AND SOCIAL SECURITY FRAUD?

The public will recall that on December 14, 2020, ACAJ issued a press release in connection with the arrest of a bailiff who has committed forgery in a bid to enable MMG Kinsevere SARL to lodge proceedings in the Commercial Court of Lubumbashi in the case opposing this company and MCK SARL.

In response to this press release, MMG Kinsevere SARL issued a news release on April 17, 20202, in which, without any substantive reasons, it attempted to question the impartiality of the ACAJ. MMG also claimed in its news release, in an attempt to naively win the sympathy of public opinion, that
ACAJ and MCK would jeopardize 3,000 direct jobs given to Congolese workers.

With regard to the alleged risk that 3,000 Congolese directly employed by MMG Kinsevere SARL
are facing the prospect of unemployment, we stated on April 20, 2020 that: “ACAJ is pleased that MMG Kinsevere SARL is giving jobs to Congolese. However, it notes that no legislation in the world would allow any company, because of the fact that ACAJ employs people and provide them best pay rates, to not comply with its contractual commitments freely entered into or to commit offences”.

ACAJ also wonders whether MMG Kinsevere SARL only benefits the 3,000 Congolese who would then be the only significant beneficiaries. Although the number of people employed has no legal bearing on the assessment of the rights and obligations of the parties to a contract, ACAJ, whose press release focus was “the legal use of a forgery committed by a bailiff”, carried out checks concerning the number of Congolese actually employed by MMG Kinsevere SARL, as this appears to be its recurrent and high-profile argument.

Following an inquiry, especially with the Tax Authority and the National Social Security Fund (CNSS), it turns out that the number of 3,000 Congolese touted by MMG Kinsevere SARL as being in direct employment, appears to be entirely false, and that the number actually declared by MMG Kinsevere SARL does not even reach a thousand, including expatriates.

Indeed, the following is what has been collected as field evidence:

(1) Tax authorities: 791 employees as of January 2020;

(2) National Social Security Fund (CNSS): 920 employees as of March 2020.

MMG, which does not stop claiming that it conducts its business in accordance with the highest ethical standards, cannot ignore the legal obligations arising from the number of people it employs directly, especially vis-à-vis to the tax authorities and social legislation.

As a consequence, ACAJ carried out an inquiry with the Tax Authority (Direction Générale des Impôts), as well as the National Social Security Fund (CNSS) on the claimed number of 3000 Congolese staff members. As mentioned above, no declaration filed with these authorities supports the number of 3000 Congolese workers being claimed by MMG Kinsevere SARL and used by it as a kind of human shield. It therefore appears to date from the declarations submitted by MMG Kinsevere SARL that the actual workforce is not about half the number of 3,000 Congolese allegedly directly employed by it.

This significant discrepancy leads ACAJ to seriously consider the following questions: 1° Would MMG Kinsevere SARL have lied to the public?

2° If MMG Kinsevere SARL actually has 3000 Congolese in direct employment, would there be tax fraud or fraud under social legislation?

“In either case, ACAJ considers this to be an unacceptable situation on the part of a company that claims to adhere to the highest ethical standards and that, moreover, would then use arguments based on fraud or fallacy to try to lecture our NGO, whose mission is precisely to ensure the improvement of the business environment for the emergence of our Country endowed with the necessary resources to lift our People out of the current situation of extreme poverty”, said Mr.
Georges Kapiamba, President of ACAJ.

“ACAJ reaffirms its firm determination to work for the strengthening of the rule of law, in particular by reporting wrondoings with the highest possible standards, and will never allow it to be accused of distorted facts based on false statements or even confessions of fraud to the law which should, moreover, trigger, as per law, criminal process”, he concluded.

ACAJ has attached hereto the documents relating to the declarations filed MMG Kinsevere regarding the number of its staff.

Previous

NDC Push For Job Security For Mopani Miners

Pres. Lungu Takes Keen Interest In Operations Of Mining Companies

Next