Program Analyst
October 13, 2024
RESTATING OSUN’s CASE AGAINST THORS EXPLORATIONS
BY Prof Lukman Jumoda
Osun State government has called on the Federal Government as well as the Federal Ministry of Solid Minerals to quickly prevail on the Subsidiary of Thor Explorations, Canada, Segilola to pay up payee taxes accrued to the State and amounts due on its acquisition of Osun shareholding as well as its responsibility on environment.
The State government stated this through Prof. Lukuman Adekilekun Jimoda, Special Adviser to the Governor on Mining and Mineral Matters while restating the state’s case against Thors Explorations Limited.
This is against the backdrop of a fact finding committee set up by the Federal Ministry of Mines to look into the claims and counter-claims. The committee was giving a week or so to submit its report.
Professor Jimoda emphasized that the state government has been on these infractions for more than 18 months with series of engagement with top officials of the mining firm.
He said: “Our amiable Governor, Senator Ademola Adeleke, had personally sat in four physical meetings with delegate of Segilola Resources Operating Limited (SROL or Segilola), a subsidiary of Thor Explorations (Thor) and with their Chief Executive Officer, Mr. Segun Lawson, in attendance.
“They always renege on their promises to pay their dues to Osun and they always run to the Federal Ministry of Solid Minerals Development Abuja to precipitate diversion and delay. So, writing to the Ministry again after our Press Conference and their two public responses; we hope this is not one of those numerous tactics”.
Professor Jimoda noted: “It is no longer a news item that Osun State has a genuine Legacy Ownership Dispute with Segilola Resources Operating Limited (Segilola) and its latest owner, Thor Explorations Ltd (Thor), which previous governments have been “evading” since 2016.”
“If we look at the “Net Asset” figure on the balance sheet of Thor Explorations Ltd. today, with some factorization models, we can see what Osun shares in Thor Explorations worth in term of values. So, the Governor of Osun State will continue to demand for it. There were other cash considerations given to other shareholders that are yet to be given to Osun State since 2016. The latter dues are accruing interests in line with universal commercial term.
“Segilola had always denied our shareholding in Thor and on 15th April, 2023 the company officially communicated with us in “black and white” that Osun State had no share in Thor”.
He stressed: “Governor Adeleke directed us to keep on confronting them with facts and figures at our disposal, until they had to cave in on the 24th April, 2024, when they wrote to us that Osun State has bonus share of 5.1m shares.
“Although this confirmed our ownership but Bonus shares over what? Where is the electronic access to the shares? Then Segilola disappeared into the tiny air, again. That is bad corporate governance. You cannot alienate the right of shareholders and you cannot treat any shareholder with prejudice, no matter the percentage of its holding.
“Like we said in our last Press Conference, though, it took Segilola, over 12 months to accept in writing that Osun State owns 5.1million bonus shares of Thor. So, our case is not like other states, which the Minister has lumped us with and asking them to invest in the sector. We have always have interests in the sector since 1993 and the asset company, then, was Tropical Mines Ltd. We had earlier made our submission to your Ministry on the historical commercial transaction, in which our interest in Tropical Mines Ltd was stripped by Segilola and was subsequently acquired by Thor in 2016; so, where is our shares?
“We made a detailed submission via a letter dated 2 July 2024 to the Ministry of Solid Minerals Development. We also did a presentation to the Ministry on the 15th August, 2024, but no official response from the Ministry up till now.
“We will like to inform you that the disputes can easily be resolved if Segilola demonstrates good faith as follows; (a) make a down payment of 20billion Naira out of the 60billion demanded as the outstanding principal and interest dues on cash considerations, which were supposed to have been paid in 2016 by Thor; (b) grant us access, electronic or otherwise to all our shares in Thor, including the bonus shares, recently conceded to us; (c) provide full repayment plan on the outstanding dues for the approval of the state Governor.
“Our Governor has said it severally that it doesn’t want Segilola to exit our state but to operate as a responsible company so as to deliver value to Osun State, as shareholder and to pay taxes/levies as stipulated by the federal laws on taxation; Personal Income Tax Act (PITA) and Company Income Tax Act (CITA).
“The two Acts of the National Assembly stipulate that the states have jurisdictions over PAYE taxes and levy on commercial activities. Segilola has failed to disclose its service providers, who are hiding direct and indirect employees on their balance sheets. So, how do we tax such employees despite the fact that PITA puts that within the purview of the states?.
“Some of these service providers are using chemicals, explosives, etc and how do we do proper security documentation or log them unto our database for tax assessment of their employees if Segilola does not cooperate with us?. To be precise, we wrote a letter to Segilola since 16th May, 2023 emphasizing the issue of security and proper documentation of all staff and operators but the company failed to disclose. One of the service providers is owing Osun State 336 million Naira as unpaid PAYE taxes of its employees. We have more than four (4) others, yet to be assessed because Segilola is shielding them away .
“We are yet to clear Segilola Resources Operating Limited on the N3.25 Billion tax obligations and none of its employees has been issued tax clearance certificate because for the past three months, Segilola has failed to provide the mandatory tax documents and information required.
“These include: (a) The official Gazette from tax authority permitting the five per cent of mining accommodation as Benefit in Kind; (b) Breakdown of the Operating Cost by vendors, stipulating Name of vendors, Cost, Type of services and the amount paid to vendors, The address of vendors, etc; (c) Evidence of remittance of withholding taxes; (d) Submission of the General ledger/activity reports and trial balances to verify salary and nominal payroll. It is unbelievable that a company, whose parent company is dual-listed on London and Toronto Stock Exchanges, cannot produce accounting records since July 11th, 2024.
“This is tantamount to Obstruction of tax process under section 97 of PITA and Segilola is unduly exposing its employees to legal prosecution by the state for working in Osun State without Tax Clearance Certificates.
“In line with the Court Order, dated September 27th, Osun State government has distrained the premises of Segilola on the 29th of September,2024, the premises, which are also being used by its staff and other tax defaulters on PAYEE taxes.
“This has been done with all sense of responsibility, it is excruciatingly painful but we have got to do what we have to do. The path to dispute resolution on tax is clear and simple in any tax jurisdiction, we require Segilola to (a) stop the obstruction of tax processes;(b) submit to us the outstanding tax documents/information required; (c) disclose all its service providers that are claiming exemptions of business premises’ levies and allegedly evading PAYEE taxes on employees’ salaries; (d) pay all outstanding tax liabilities established on direct and indirect employees, working on Segilola premises and sites. Once, these are done, we will communicate with Segilola and we will move beyond dispute”, Prof Jimoda posited.
