ROBBER BARONS
Christo Wiese may be no angel, but in the most recent tax imbroglio, the real villains of the piece are Tullow and Ensafrica
Over the past two weeks, Shoprite chair Christo Wiese has become the lightning rod for public anger over multinationals fleecing SA of tax. This, of course, entirely misses the real villains of the scandal in which London-listed Tullow Oil whisked R3.9bn in assets out of SA without paying tax — a scheme exposed by amabhungane.
Rather, if you’re looking for accountability, the place to start would be at the door of the robber barons themselves, Tullow, or of Africa’s largest law firm, Ensafrica, which structured the complicated deal that the SA Revenue Service (Sars) claims was “a sham”.
It worked like this: Tullow Oil’s African oil and gas assets were held in an SA company called Energy Africa. Tullow “sold” Energy Africa to a company controlled by Ensafrica called Elandspad for $543.7m. Only, no money changed hands: instead, the law firm set up a loan account — essentially, a R3.9bn IOU from Elandspad to Tullow. Then, that loan account was transferred to Tullow’s Dutch arm, which through a series of asset swaps ends up, voila, with the R3.9bn in African assets. Later, Ensafrica sold the Energy Africa shell to Wiese’s company Titan so it could use its R198m “tax loss”.
It is complicated. But then if everyone could simply magic assets around like dizzy rabbits through false-bottomed hats, it wouldn’t be called “expert tax advice”, would it?
In court papers, Sars claims the “unstated purpose” of this complicated structure was to “remove the underlying assets of the taxpayer from SA without paying [capital gains tax] or [secondary tax on companies]”. It’s hard to disagree.
But rather than focus on the original sin of Tullow Oil and Ensafrica, South Africans have rounded on Wiese. If anything, Wiese bought a lemon from Ensafrica that got him into trouble when Sars came knocking, trying to
If everyone could magic assets around like dizzy rabbits, it wouldn’t be called ‘expert tax advice’, would it?