Wiese distances himself from Tullow tax dispute
Shoprite chairman Christo Wiese distanced himself on Thursday from a R3.7bn tax dispute between the UK-listed Tullow Oil and the South African Revenue Service (SARS).
Business Day’s sister publication, Financial Mail, published a report on Thursday by investigative journalism team amaBhungane that detailed how Africa’s largest law firm, ENSafrica, had restructured Tullow Oil in a way that allowed R3.7bn in assets to be spirited out of SA.
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]”.
But after that, ENS sold the shell that was left after Tullow’s assets were removed to Wiese’s company Titan. Wiese planned to use the assessed tax loss in that company.
SARS is now seeking to claim R217m from Wiese and others, including a former ENS executive, claiming they had “knowingly dissipated” assets from that company to “obstruct the collection of the [R3.7bn] tax debt” (partly based on the alleged historical Tullow debt).
The case in which Wiese is disputing this will be heard in the High Court in Cape Town in August.
Wiese told Business Day ENS had approached him to buy Tullow. ENS had given him warranties that the company involved no tax risks, he said.
“Within a year or two, whoops, we got wind that [SARS] was alleging that there was a tax benefit to the Tullow group that flowed through the structure, and that there was in fact, contrary to the representations and warranties that we were given, a tax risk,” he said.
Wiese said he had told ENS that they wanted to hand Tullow back and take their assets out.
His court battle with SARS was only for R217m — not the entire R3.7bn that is in dispute with Tullow Oil, Wiese said.
ENSAfrica said a number of advisers “provided advice and input” on Tullow’s restructure, adding, “our firm and its affiliates have at all times complied with all the requirements of the relevant tax laws”. “SARS has not sought to impugn the role of any of the advisers, including ourselves,” ENS said.
Tullow’s share price fell by as much as 3.56% on Thursday on the London Stock Exchange.