LONDON--Associated British Foods PLC (ABF.LN)), an international
food, ingredients and retail group which owns budget clothing store
Primark, Monday denies that Illovo is engaged in anything illegal,
immoral or designed to reduce the tax payable to the Zambian
government.
MAIN FACTS:
-Since 2008 Illovo has invested 150 million pounds to double the
production capacity in Zambia and create the largest sugar mill in
Africa.
-Capital allowances on this investment have resulted in no
corporate tax being payable since the investment was made.
-The availability of these allowances has nothing to do with tax
avoidance.
-Payments made by Zambia Sugar for the services of third party
contractors, expatriate personnel in Zambia and export services
provided by Illovo, are made at cost.
-As a result there is no artificial reduction in profit in
Zambia Sugar; payments are made to overseas companies, largely for
historical reasons, and aren't driven by tax considerations.
-Company was responding to an ActionAid report.
-Shares closed Friday at 1759 pence valuing the company at
GBP13.93 billion.
-Write to Ian Walker at ian.walker@dowjones.com
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