Malawi’s government has filed a staggering claim of $309 billion in unpaid taxes and royalties from Columbia Gem House, a US-based gemstone company, over ruby exports from the country spanning the last decade. The demand, disclosed by Malawi’s Attorney General Thabo Chakaka Nyirenda, also includes additional claims from other multinational companies, including $4 billion from French energy giant TotalEnergies and $9.5 million from Turkish tobacco firm Star Agritech.
The claim against Columbia Gem House, a family-owned business known for its fair trade practices, has been dismissed as “baseless and defamatory” by the company. Columbia Gem House denies the accusation of underreporting the value of its ruby exports, stating that the figures provided by Malawi “do not add up.”
Nyirenda explained that the government’s claim was based on evidence, including declarations made by the company in the US and information previously published on its website, which has since been removed. The amount requested includes not only the unpaid taxes but also interest accrued over the past ten years.
Columbia Gem House, which buys rubies from Nyala Mines, a Malawian-owned company in which the government holds a 10% stake, argued that it does not directly operate in Malawi. However, Nyirenda insisted that the government was not involved in the day-to-day operations of Nyala Mines and alleged the company had changed its name to obscure its ownership.
The size of the demand—nearly 300 times Malawi’s national debt and 22 times its GDP—has raised concerns. Last year, Malawi was forced to take a $174 million bailout from the International Monetary Fund (IMF) due to financial struggles. Economist Wisdom Mgomezulu suggested that the government’s current financial difficulties might be influencing its pursuit of large claims, although he cautioned that the scale of the demands seems disproportionate to the country’s economy.
Malawi is also pursuing $4 billion from TotalEnergies, stemming from an oil storage agreement made in 2001. Nyirenda alleges that while profits from the deal were supposed to be shared equally, TotalEnergies stopped paying after two years in 2006, prompting the government to take legal action.
The dispute with Star Agritech involves the alleged non-payment for three million tonnes of tobacco purchased from Malawi in 2013. The Malawian government claims that Star Agritech owes over $9.5 million, following a court ruling in Hong Kong. However, Star Agritech disputes the amount, claiming it purchased only $5 million worth of tobacco and alleging quality issues with the product.
Malawi’s actions come amid growing efforts by African governments to hold multinational corporations accountable for unpaid taxes and royalties. Recently, Mali issued an international arrest warrant for Barrick Gold’s CEO over a $500 million tax dispute.
