The tax man has drawn first blood in its multi-year fight with tycoon Christo Wiese and three of his business associates to pay millions of rand it claims are due to the fiscus over an alleged multibillion-rand “tax evasion” scheme.
This is after the Western Cape High Court ruled that the South African Revenue Service (Sars) could use behind the door evidence given by Wiese and his associates against them in court proceedings.
Sars contends that Wiese and former executives at law firm ENSafrica created a tax structure to help Irish oil firm Tullow shift assets valued at R3.9-billion out of the country, avoiding paying taxes in the process.
The tax man has since slapped Wiese, Hendrik Visagie, Gert Viljoen and Frederick Hofmeyr with a bill of R217-million in taxes, accusing the men of having designated a complex scheme to avoid paying taxes. The summons forms part of a wider R3.7-billion rand claim by Sars.
The matter was first reported by amaBhungane in 2018 after Sars approached the courts demanding the money from the businessmen.
The dispute can be traced all the way to 2007. AmaBhungane at the time reported how ENSafrica had restructured Tullow Oil in a way that allowed R3.7-billion in assets to be spirited out of the country.
In court documents, Sars claimed ENS’s restructuring of Tullow was a “sham” and nothing more than “an elaborate scheme intentionally designed to facilitate the evasion of [tax]”.
Sars claimed ENSafrica restructured Tullow, leaving it in charge of a South African company that was a tax shell, and then sold this on to Wiese and his Titan group.
AmaBhungane then alleged Wiese moved assets out of the company and sold it to a former ENSafrica executive (Viljoen) who told Sars there weren’t any assets or cash to claim.
ENSafrica denied any allegations of impropriety.
The matter has been dragging on in courts since 2018. However, there was progress on the drawn-out matter this month after the Western Cape High Court ruled that Sars could use the evidence tendered by Wiese, Visagie and Viljoen at an inquiry held in 2015 and 2016 for purposes of proving its claim.
“The final issue to consider is, the evidence given by the First (Wiese), Second (Visagie) and Third (Viljoen) defendant, against whom it is admissible. In my view, the trial judge in the main proceedings would be best placed to consider that point when exercising his/her discretionary powers in ensuring a fair trial. To do so now would be to determine issues prematurely and may compromise the fairness of the main trial.”
Wiese was once regarded as the country’s richest man. This changed in 2017 following the collapse of furniture retailer Steinhoff due to a multi-billion euros scandal. Wiese saw his interest in the firm slashed by nearly R60-billion. He has since launched a R59-billion lawsuit against the company. Wiese’s interests in Shoprite have become the crown jewel of his empire.
Wiese and his associate were not available to comment.
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