ARSP Exposes Subcontracting Exploitation in Four Mining Companies
The Regulatory Authority for Subcontracting in the Private Sector (ARSP) has uncovered a network of featured shareholders utilized by nine subcontracting companies operating within major mining contracts in Lualaba and Haut-Katanga provinces.
Led by Director General Miguel Kashal Katemb, this action follows a control mission in Greater Katanga, revealing egregious cases of pseudo-nominee practices in subcontracting.
In a hearing organized by the ARSP CEO, attended by representatives from Eurasian Resources Group (ERG), lawyers, ARSP directors, and partners from the implicated companies, it was revealed that ERG, predominantly owned by Russians and Kazakhs, orchestrated the creation of the subcontracting firms.
These firms falsely depicted Congolese individuals as majority shareholders to evade Congolese subcontracting laws mandating over 50% Congolese ownership.
This nominee strategy masked a scheme aimed at diverting financial wealth abroad, as evidenced by significant turnover figures. Despite generating substantial revenue, Congolese shareholders received minimal dividends, averaging $500-$1,000 monthly, while ERG facilitated transactions through opaque banking channels.
The total turnover for 2023 amounted to USD 535,369,909.67, with notable contracts including Surtek’s supply to Metalkol mining company in Kolwezi, totaling USD 227,111,448.38, and Etalon SA’s reagent supply to Metalkol, totaling USD 97,638,695.44.
ARSP plans to take decisive actions and impose severe penalties against these fraudulent practices, holding both ERG and complicit shareholders accountable for exploiting Congolese labor for illicit economic gains.
