ZURICH (Reuters) - The Swiss town of Rueschlikon that is home to Glencore (GLEN.L) boss Ivan Glasenberg has cut taxes after a huge windfall following the commodity company’s flotation this year.
The record listing of the world’s largest diversified commodities trader in May made Glasenberg — the company’s largest single shareholder with a stake of almost 16 percent — a paper billionaire several times over.
The Rueschlikon town council voted late on Monday to cut its tax rate by 7 percent from 2012 due to extra revenues this year, which resulted in a surplus of 60 million Swiss francs ($65.35 million), or 12,000 francs for each of its 5,000 residents.
The council declined to put a figure on the windfall due to the Glencore flotation. Swiss residents have to pay income taxes or wealth taxes to their local authorities, as well as regional and national governments.
The council meeting rejected a “solidarity” proposal by church and left-wing campaigners for the tax cut to be limited to 5 percent and the difference to be donated to social projects in the regions where Glencore generates its profits.
“The discussion showed that the people of Rueschlikon prefer to demonstrate solidarity in private rather than via the municipality,” council president Bernhard Elsener told Reuters.
Swiss cantons and municipalities compete to offer low tax rates to individuals and companies, making the country popular as a base for foreign multinationals, particularly in the lowest tax cantons like Zug, where Glencore is based.
Until the Glencore listing, Glasenberg, who grew up in South Africa and became CEO in 2002, had lived with his family in relative anonymity in Rueschlikon — a lakeside town about 6 km from Zurich where he moved in 1994.
Switzerland has the highest concentration of millionaire households in Europe but the Glencore flotation has made Glasenberg one of the country’s richest men, worth 6-7 billion francs according to the Bilanz magazine.
The listing has increased scrutiny of Glencore by environmental and corruption campaigners over its involvement in mining operations in countries from Zambia to Colombia.
Glasenberg defended Glencore’s conduct in developing countries in an interview with Swiss newspaper 20 Minuten interview published on Monday, saying the company helped finance health, education, environmental and other social projects.
He also said he would not sell any of his Glencore shares as long as he worked there. The shares have traded below their offer price of 530 pence since their market debut and were down 0.8 percent at 421.6 pence by 7 a.m. ET.
Reporting by Emma Thomasson