MOYANE OKAYS DODGY R70M PAY­MENT TO OAKBAY

Sars boss in­ter­venes to pay mas­sive re­fund af­ter tax of­fi­cials refuse to bend the rules

CityPress - - News - AN­GELIQUE SERRAO an­gelique.hartleb@24.com

This week, the Gupta family re­ceived a R70 mil­lion VAT re­fund pay­ment which has raised eye­brows and se­ri­ous con­cern in the SA Rev­enue Ser­vice (Sars). News24 and City Press learnt that the pay­ment caused a huge fall­out among Sars staff, and tax boss Tom Moyane al­legedly in­ter­vened to have the Gup­tas’ pay­ment made into a lawyer’s trust ac­count, against the ad­vice of Sars and out­side lawyers See page 2

The Gupta family re­ceived much-needed re­lief this week in the form of a R70 mil­lion value-added tax (VAT) re­fund pay­ment that raised se­ri­ous eye­brows and con­cern at the SA Rev­enue Ser­vice (Sars). News24 and City Press have learnt from four in­de­pen­dent sources that the pay­ment caused a huge fall­out in Sars and ne­ces­si­tated the in­ter­ven­tion of tax boss Tom Moyane.

Sars re­fused to com­ment on the mat­ter and did not deny Moyane’s per­sonal in­volve­ment in the Gup­tas’ wind­fall.

In the week that the ex­tent of the family’s cap­ture of the state was laid bare through a mas­sive email leak, Sars paid more than R70 mil­lion for the ben­e­fit of Oakbay In­vest­ments in a trans­ac­tion that in­sid­ers say was far from reg­u­lar.

The pay­ment went through fol­low­ing var­i­ous le­gal con­sul­ta­tions both within and out­side Sars caused by the clo­sure of the Gup­tas’ bank ac­counts in South Africa. The family al­legedly wanted the money to be paid into an over­seas bank ac­count or into the trust ac­count of a lawyer.

VAT re­funds are nor­mally only paid into a tax­payer’s ac­count, and not into the ac­count of any proxy, Sars in­sid­ers say.

Af­ter the coun­try’s four ma­jor banks closed their ac­counts and de­clined to do any fur­ther busi­ness with Gupta-owned com­pa­nies, it is un­clear which bank ac­count the family is cur­rently us­ing to trade and pay em­ploy­ees from.

The Gup­tas orig­i­nally re­quested the VAT re­fund money to be paid into a bank ac­count abroad.

“Sars of­fi­cials re­fused be­cause this would be con­trary to the law and Sars pro­ce­dures,” said one in­sider. “Sars got an in-house le­gal opin­ion that con­firmed it could not be done.”

Oakbay then al­legedly asked that the money be paid into a lawyer’s trust ac­count.

This time, Sars sought a le­gal opin­ion from an ex­ter­nal se­nior coun­sel. Again, the le­gal opin­ion came back say­ing the re­fund could not be paid in this way.

Sars of­fi­cials then re­fused to make the pay­ment on the ba­sis that it wasn’t law­ful and Sars poli­cies didn’t al­low it.

At this point, Moyane al­legedly in­ter­vened and se­cured the pay­ment to the Gup­tas. Ac­cord­ing to sources, the re­fund was made be­grudg­ingly by Sars staff and left tax em­ploy­ees feel­ing de­spon­dent and an­gry.

News24 and City Press were given the name of an un­known pri­vate com­pany into which the VAT re­fund pay­ment was fi­nally made, but couldn’t con­firm the ve­rac­ity of the claim. The Gupta family and its busi­nesses are han­dled by the VIP tax­payer unit within Sars. This unit is in­tended for politi­cians, po­lit­i­cal par­ties, past and for­mer se­nior govern­ment of­fi­cials and their fam­i­lies, and cer­tain top busi­ness peo­ple con­sid­ered strate­gic.

Sars spokesper­son Sandile Memela would not con­firm or deny any­thing, cit­ing sec­tion 69 of the Tax Ad­min­is­tra­tion Act (2012) that doesn’t al­low Sars to dis­cuss or di­vulge in­for­ma­tion about the tax af­fairs of a tax­payer or trader. “This in­cludes com­ments on pos­si­ble re­funds paid to a tax­payer or trader.”

Gert van der Merwe, the lawyer for the Gup­tas, said he was not aware of any re­fund, but if any money from a re­fund was paid into a lawyer’s trust ac­count, it wasn’t his.

“I haven’t re­ceived any pay­ment from Sars.”

Me­dia queries sent to Oakbay on Fri­day re­mained unan­swered.

The Gupta family has had is­sues with their bank­ing af­ter South African banks closed their ac­counts cit­ing “sus­pi­cious trans­ac­tions” and re­ported them to the Fi­nan­cial In­tel­li­gence Cen­tre (FIC). South Africa’s four big­gest banks closed ac­counts linked to the Gupta family more than a year ago, cit­ing the need to com­ply with in­ter­na­tional bank­ing rules when deal­ing with cus­tomers and con­cern over their rep­u­ta­tions.

The family – led by brothers Atul, Ajay and Ra­jesh – asked then fi­nance min­is­ter Pravin Gord­han to stop the banks from ter­mi­nat­ing their ac­counts, spurring Gord­han to seek a court or­der in Oc­to­ber stat­ing that he could not pre­vent len­ders from cut­ting clients. Judg­ment was re­served in March.

Gord­han’s ap­pli­ca­tion in­cluded a doc­u­ment from the FIC, list­ing 72 re­ports of sus­pi­cious trans­ac­tions to­talling $520 mil­lion (R6.8 bil­lion) that im­pli­cated mem­bers of the Gupta family and their com­pa­nies. The court ruled that the doc­u­ment was not rel­e­vant to the ap­pli­ca­tion.

In Septem­ber last year, Min­eral Re­sources Min­is­ter Mosebenzi Zwane, who has been at the re­ceiv­ing end of the Gup­tas’ largesse, an­nounced a ju­di­cial com­mis­sion of in­quiry into the banks’ ac­tions.

This was later de­nied by Cab­i­net and Pres­i­dent Ja­cob Zuma re­buked Zwane.

In March this year, the Bank of Bar­oda’s South African branch also started clos­ing ac­counts of com­pa­nies con­trolled by the Gupta family.

The Mum­bai-based lender was said to be wind­ing down its re­la­tion­ship with com­pa­nies re­lated to the Gupta family to en­sure it was in com­pli­ance with in­ter­na­tional bank­ing rules.

Moyane al­legedly in­ter­vened and se­cured the pay­ment to the Gup­tas

GONE ROGUE Sars boss Tom Moyane

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