To my mind | Bruce Whit­field

Dave King has proven he has the dogged de­ter­mi­na­tion to fight and the con­sid­er­able fi­nan­cial re­sources to seek an out­come suit­able to him

Finweek English Edition - - FIN WEEK CONTENTS - BRUCE WHIT­FIELD

TEN YEARS ON and the Na­tional Pros­e­cut­ing Author­ity (NPA) ap­pears hell-bent on a crim­i­nal pros­e­cu­tion of busi­ness­man Dave King – best known for his R1,4bn tax bill. Based on his own ad­mis­sion, Dave King failed to pay R290m in taxes. In a com­plex deal struck with the SA Rev­enue Ser­vice and the SA Re­serve Bank the par­ties last year signed off on a R636m set­tle­ment, which cov­ered out­stand­ing taxes as well as in­ter­est. In re­turn, the Re­serve Bank and tax au­thor­i­ties would with­draw crim­i­nal charges against King and waive the 200% penal­ties al­lowed un­der law.

It seemed a good deal. The fis­cus would get at least part of what it had ar­gued since 2000 was due to it, King would be seen to have been ad­mon­ished and the mat­ter could be con­signed to the archives. How­ever, the deal fell apart be­cause the NPA re­mains de­ter­mined King should face crim­i­nal sanc­tion. For the con­tro­ver­sial busi­ness­man, that’s un­ten­able. The logic goes that any­one can make a mis­take with re­gard to their taxes but if found guilty of a crim­i­nal of­fence their rep­u­ta­tion can’t be re­ha­bil­i­tated. King be­lieves strongly he has a name worth pro­tect­ing. In an­nounc­ing his reap­point­ment as ex­ec­u­tive chair­man of MICROmega – the listed in­vest­ment hold­ing com­pany he founded af­ter his much pub­li­cised exit from Spe­cialised Out­sourc­ing – King has upped the ante.

The NPA must de­cide whether it has the pros­e­cu­to­rial mus­cle to delve into the com­plex­i­ties of this case, as well as the means and the ap­petite for the in­evitable ap­peals that might fol­low. Even Sars re­sorted to hir­ing pri­vate ad­vo­cates in its pur­suit of King, which cul­mi­nated in it hav­ing to pay more than half of the to­tal R450m spent by both par­ties over the du­ra­tion of that bat­tle.

King has proven he has the dogged de­ter­mi­na­tion to fight and the con­sid­er­able fi­nan­cial re­sources to seek an out­come suit­able to him. It was his sale of shares in Out­sourc­ing, the Nineties go-go stock that made him su­per rich in the days be­fore manda­tory di­rec­tors’ deal­ings dis­clo­sure. His ac­tions were le­gal but raised eth­i­cal ques­tions as hun­dreds of gullible in­vestors saw their in­vest­ment shred­ded.

In an ideal world we’d ex­pect the NPA to pur­sue any­one it sus­pects of crim­i­nal­ity. Though our courts are over­bur­dened and pros­e­cu­tors over­stretched, a deal could be res­ur­rected. The NPA has shown its will­ing­ness to deal in far sim­pler cases.

brucew@fin­week.co.za

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