There were howls of outrage when gun Fairfax Media business journalist Michael West broke a sensational story in June that one of the world’s biggest mining companies, Swiss-based Glencore, was paying next to no tax on its Australian coal business, the country’s biggest.

West, who has written a series of cracking articles for Fairfax on tax avoidance by multinationals from Google to Facebook to IKEA to William Hill, reported that a detailed analysis of the accounts of coal mining subsidiary Glencore Coal Investments Australia (GCIA) by a former finance executive for a multinational company showed it had paid “almost zero tax” over the last three years, against revenues approaching $15 billion.

West’s story was picked up round the world, and his reporting has doubtless helped trigger a looming Senate inquiry into corporate tax avoidance. Glencore’s response was immediate and furious, including a statement that the company had paid $8 billion in taxes and royalties over the last seven years. This was reported elsewhere uncritically, although royalties, of course, are not taxes at all.

More concerning, Glencore launched an ad hominem campaign to smear and intimidate West himself, and the mining industry’s peak body was only too happy to weigh in. In a media release that would be laughable if it were not so serious, the Minerals Council claimed “fundamental and cringe-worthy errors are not new for this correspondent” and accused West of failing to understand the difference between sales and profits, or that tax was levied on the latter — although as a former broker and one of Australia’s most experienced business journalists, West understands this perfectly and his original story included the line, “Tax is levied on profits, of course, not sales”.

So Australia’s most powerful industry hurled itself against one journalist, doing his job, asking questions — and what could be more in the public interest than whether taxpayers are being short changed?

Glencore took its concerns direct to Sydney Morning Herald editor Darren Goodsir. Fairfax issued a correction, based on a written statement from Glencore that it had paid $400 million tax in Australia over the last three years. Goodsir told Crikey that Fairfax was in “ongoing correspondence with Glencore and a number of other companies in relation to ongoing community deliberations about the appropriate amount of corporate tax that should be paid in Australia”.

The thing is, we are reduced to taking Glencore’s word for it. The group’s accounting is opaque. Unlike comparable unlisted mining businesses in Australia — including Gina Rinehart’s Hancock Prospecting, or Anglo-American — Glencore no longer files consolidated, general purpose accounts that provide a complete picture of the affairs of the company and its subsidiaries, including taxation. Why the company is allowed to do this by its auditor Deloitte Touche Tohmatsu, and the tacit agreement of the corporate regulator ASIC, is another story altogether.

The accounts of Glencore Coal Investments Australia (GCIA), and its parent AZSA Holdings, give a partial picture at best. First, the last three years’ tonnages reported by GCIA — 47.8 million tonnes (2013), 44.3 million tonnes (2012), and 41.6 million tonnes (2011) — fall significantly short of the Australian totals reported by Glencore Plc — 65 million tonnes (2013), 60 million tonnes (2012), and 37.4 million tonnes (2011) — suggesting there is a significant amount of production not counted. Second, the two sets of accounts only appear to cover Glencore’s coal operations in New South Wales. None of the coal mines in Queensland — Oaky Creek, Collinsville, Newlands, Rolleston or Clermont, mainly smaller-volume but higher-value coking coal mines — appear on the list of subsidiaries for AZSA or GCIA.

“The tax Glencore pays on its Australian coal business remains a mystery. For a business this size, such a lack of transparency is appalling.”

What’s more, the numbers we have don’t add up to $400 million — not even close. Going by the cash flow statements, which record tax dollars actually paid to the Australian Taxation Office rather than notional accounting adjustments, GCIA received a $29 million tax refund in 2013, but paid $23 million in 2012 and $21 million in 2011, making a total of $15 million in tax on gross profits of $4.6 billion over those three years. That’s next to nothing, in anyone’s language.

The AZSA Holdings accounts are even more confusing. AZSA got a cash refund of $8 million in 2013, paid $5.8 million in 2012 and $37.6 million in 2011, for a total tax bill of just $35.4 million. On a consolidated basis, which includes subsidiaries, AZSA paid $145.4 million in 2012 and $58.8 million in 2011 — or a total of $204.2 million on gross profits of at least $3.6 billion to $4.6 billion.

Glencore this morning told Crikey that the $400 million it paid in corporate income tax between 2011 and 2013 had been paid from “all of its operations in Australia” — not just coal, but all the other commodities it mines here such as nickel, copper and zinc — which would appear to vindicate West’s original article, which explicitly focused on coal.

Glencore says the coal industry has suffered a downturn that has eroded profitability at many coal mines and would naturally be reflected in much lower tax payments. Glencore also says it has regular and open meetings with the ATO and is in the middle of a corporate restructure that will simplify things.

Glencore said it had more than 200 companies in Australia:

“AZSA and GCIA are just two of these. Taking the gross profits of just two entities cannot give an indication of the corporate tax liability of Glencore in Australia. It should be understood that gross profits include a wide range of things like overheads, payroll, interest payments, et cetera.”

So the tax Glencore pays on its Australian coal business remains a mystery. For a business this size, such a lack of transparency is appalling. Jeffrey Knapp, an accounting lecturer from UNSW, has reviewed Glencore’s accounts and recently sat in on a meeting between the company and Fairfax. Knapp told Crikey it was impossible to confirm how much tax Glencore had in fact paid on its Australian coal business in the last three years using publicly available information: “A 2013 consolidated cash flow statement for AZSA would certainly help,” he said.

Glencore will not help explain its Australian corporate group or reconcile its claims of income tax paid to publicly available accounts, says Knapp but if a journalist makes an error doing the story in good faith, “like a corporate wasp they just want to go on the attack and sting repeatedly. There is no understanding that a higher level of corporate disclosure and accountability is in the public interest, and frankly I think it is also in company’s best interest.”

AZSA files accounts on an unconsolidated or standalone basis because, in the directors’ view, the company is a non-reporting entity, as “there are unlikely to exist users of the financial report who are unable to command the preparation of reports tailored so as to satisfy specifically all of their information needs”.

But Knapp says this “bald-faced statement” is completely inadequate for a business with assets of roughly $10 billion and thousands of employees, contractors and creditors across the country — all of whom could have a vital interest in Glencore’s financial position, which is the rationale for public reporting in the first place. “In my opinion, AZSA is a reporting entity every day of the week and twice on Sundays,” said Knapp.

Knapp also pointed to the 2009 annual accounts of an AZSA subsidiary, Resource  Pacific Holdings Pty Ltd, emerging years late on ASIC’s database on 31 July 2013.  “There are a lot of large proprietary companies in the AZSA group, and it appears that Glencore may have some issues with late and missing accounts,” he said.