A newly leaked document related to the Ndola-based Zambezi Portland Cement (ZPC) company shows that under the disputed control of local financier Rajan Mahtani, the company has failed to pay taxes dating back to December 2014.
According to a sealed letter dated 30 March 2015 from the Zambia Revenue Authority (ZRA), the company has failed to pay both its Mineral Royalty taxes and PAYE over certain past periods. Meanwhile, the former owners claim that Mahtani has stolen as much of $100 million in profits from the company over the past three years.
The letter states: “We wish to adivse that the following Tax returns for the stated periods below have not been submitted contrary to Section 46(1), 46(2), and 46(3) of the Income Tax Act. Please be informed that these returns are late and you will be charged penalties for each period the return remains NOT submitted as prescribed by part (v) of the Income Tax Act.”
According to PACRA documentation, the directors of the company – whose appointments are disputed by the company’s original owners – are listed as Rajan Mahtani, Joan Craven, Peter Kanaganayagam, Timothy Mushibwe, John Mambo, Dumisani Tembo, and Inonge Wambulawae, and would be the ones responsible for the payment of taxes during the cited period.
However in recent weeks the company has been affected by numerous changes in management as the long-running legal dispute for control of the company has heated up. In late March, Bishop John Mambo stepped down from ZPC, allegedly to begin a series of hostile attacks against President Edgar Lungu at Mahtani’s instruction. Peter Kanaganayagam decided to leave the country once the courts ruled to revoke the deportation orders against the company founders, and was replaced by Stephen Mutambo, formerly of Maamba Collieries Limited (MCL).
The tax dodge takes place at a moment in which ZPC continues to produce valuable returns. According to a company press release from February 2015, “the year 2014 the total output for ZPC was registered at 4, 73, 985 tonnes. Inspired by this successful outcome, Dr. Mahtani has confirmed that he will soon be opening a lime plant in Masaiti along with making employment arrangements for 150 people within the next two years.”
However critics of Mr. Mahtani indicate that there is a past track record of taking over companies to strip them down.
“This is a typical Mahtani tactic – steal control of a valuable asset, and then bleed it dry,” said one disgruntled employee at ZPC contacted for this article. “He has invested nothing in ZPC since taking over, and the plant has deteriorated, the quality control is down, and safety has become hazardous. The same can be said of the Radisson Blu Hotel – he invests nothing in maintenance, and just takes money out.”