TANZANIA : Barrick Gold / Acacia Mining lose appeal to overturn March 2016 guilty verdict of tax evasion

By Samantha Cole by Tanzania Business Ethics

Public letter to the President of BARRICK GOLD, Kelvin Dushnisky and the CEO of ACACIA MINING, Bradley Gordon

Dear Mr. Dushnisky and Mr. Gordon

The law certainly entitles every guilty defendant to appeal their guilty verdict. In your case, Barrick Gold / Acacia Mining were found guilty AGAIN of tax evasion, on 31 March 2016.

To remind you, last year, you started your appeal to overturn the Judgment of the Tax Revenue Appeals Board in Tax Appeal No. 22 of 2011 (Fikirini, VC) dated 15th May 2011.
On 31 March 2016, the TAX REVENUE APPEALS TRIBUNAL in Dar es Salaam returned their 23 page Judgment in the matter of your Appeal.  As is public knowledge, your Appeal was thrown out and Barrick had to pay full costs.

Please allow us to quote directly, 3 paragraphs from pages 20 and 21 of the Judgment:

The conclusion that can be drawn from the above definitions is that the explanation offered by ABG (African Barrick Gold) as the source of dividends, i.e., distributable reserves and IPO proceeds is far from being plausible. In the circumstances, it is fair to conclude that the respondent’s argument that the transactions were simply a design created by the appellant aimed at tax evasion was justified. One also wonders as to how could part of IPO proceeds, a one-off event, even if those proceeds were distributable as dividends (which in law they are not), could explain the payment of four-years, back-to-back dividends to the appellant’s shareholders.

Since ABG’s only entities that carry on business anywhere in the world are the three Tanzanian gold-mining companies, ABG’s only source of revenue that could create net profits or retained earnings would be the three Tanzanian companies (or one or more of them). While none of them was allegedly making any profits, and since the appellant has no other subsidiary anywhere in the world engaged in business, one is compelled to further conclude that at least one, if not more or all, of the appellant’s three gold producing subsidiaries in Tanzania was making profit. We see no other plausible explanation.

Ultimately, the fact that none of ABG’s subsidiaries is declaring any profit that could provide its holding company with such huge net profits sufficient to distribute to its shareholders four years in a row is what in our respectful opinion constitutes the evidence of a sophisticated scheme of tax evasion…..

So…. the Tribunal established, beyond any doubt, that Barrick Gold had a clear and present agenda to cheat their host country, Tanzania, from paying taxes.

Nevertheless, the law is the law and your lawyers, undoubtedly making BIG BUCKS in fees and consultations, were only too delighted to receive your instructions to start an Appeal process to overturn the March 31 Judgment.

And this week, the three Judges in the Court of Appeal gave their Judgment – and again (not surprising), Barrick Gold and Acacia Mining find themselves facing the decision of GUILTY, again of tax evasion.
The three Judges, Justice Salum Massati, Justice Stella Mugasha and Justice Edward Rutakangwa made their ruling very clear and fully agreed with the Commissioner General, Tanzania Revenue Authority (TRA) and the Judgment brought by the Tribunal on March 31, 2016.

We, in Tanzania, have sadly grown accustomed to the terrible treatment that Barrick Gold and Acacia Mining dish out to our communities around the Barrick mines, the murders, the rapes, the violence, the destruction of properties, the death of the cattle and poisoning of the rivers and dams leading to massive environment devastation…. (we do give credit for the school desks, the roads you build and other benefits but those are lost in the dark shadow of your devastation)…..  And very sadly, the list goes on, almost a copy of what happens in other countries worldwide where Barrick operate their gold mines.
Clearly, the apple doesn’t fall far from the tree and Acacia Mining, Barrick Gold’s daughter company, has learnt the same modus operandii from “mother company”.

As much as this US$ 42 million verdict against Barrick Gold / Acacia Mining is nothing more than a drop in the ocean for them, and they wont even blink an eye at paying the TRA, possibly the most amazing or unbelievable act coming out of this whole sad fiasco is Acacia Mining’s public press release on their website, dated October 5, 2016.
In spite of the three Justices ruling against Barrick and in favour of the TRA, Acacia actually have the audacity to write:

“……. At this stage, the Court of Appeal has made no findings with respect to the claim for withholding tax or alleged tax evasion, and rather dismissed Acacia’s initial appeal on procedural matters. Acacia will be lodging a corrected appeal against the claim which will be heard at the Court of Appeal in due course.

Any further comment is inappropriate at this stage, other than to state that Acacia has and will continue to comply with all its lawful obligations to pay domestic and international taxes and has not undertaken tax evasion of any form.

Yes, we are Africans and yes, Barrick Gold and Acacia Mining still operate here in Tanzania as if these are still days of colonialism but, Mr. Dushnisky and Mr. Gordon, how in the world do you expect to try fool everyone into believing your absolute misleading and blatantly inaccurate press release above?
Indeed, the people of Tanzania speak more Swahili than English but we ALL understand enough English to know the truth. So, clearly you are deliberately misleading your overseas investors and shareholders…. God help them under your cruel swords!

How can you possibly meet with our country’s officials and look them in the eye when you are so dishonest and unethical in your business dealings?

Mr. Dushnisky, for almost a year we have been writing you public letters to urge you to come here to Tanzania and clean up the mess that Mr. Gordon is making here, at ground level.  Maybe you see him as a wonder-boy in your London or Toronto Boardroom.  But here, in Tanzania, Acacia Mining is a nightmare.

Later we will address the new announcement about closing one of your mines here next year.


Samantha Cole


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