Durban businessman in R235 million SARS tax probe

THE payment of a staggering R235 million to a Durban businessman in VAT returns by SARS has raised eyebrows and prompted a judge to call for a high-level probe.

In an exclusive, POST has established that the businessman and a bookkeeper are being prosecuted in connection with the matter.

But questions have been asked about why others who might have had a hand in the alleged scam, possibly SARS employees, have not yet been identified.

According to papers filed in the Durban Magistrate’s Court, Judge Essa Moosa of the complaints division of the Directorate for Priority Crime Investigations (DPCI) has requested a thorough probe into the alleged scam.

Vikash Mohan, a bookkeeper who runs VM Business Services, and Saravan Devaraj Govender, owner of Kairos Holdings (Pty) Ltd, are facing tax fraud charges in that court.

POST can also reveal that the criminal case against Govender has been postponed to an unconfirmed date because he has launched an application in the Durban High Court challenging the constitutional validity of his prosecution.

Mohan, represented by attorney Azgar Ally Khan, is also an accused in two unrelated tax fraud matters in the Durban Magistrate’s Court. He is due back in court next month.

His co-accused in the other two cases are Mohamed Majam and Raventhran Naidoo.

The State claims SARS was defrauded of R7.6m in the matter involving Majam and of R6.4m in the case involving Naidoo.

Regarding the R235m which was allegedly deposited into Govender’s Standard Bank account, the State claims that SARS was defrauded between October 2011 and April 2012.

It alleges that four separate payments, including one for R210.9m, had been made after invoices were submitted for consulting services regarding bottling water, content testing and analysis.

The State claims this was a ruse to defraud SARS.

Selective

Judge Moosa’s intervention came about after Mohan complained to his office that he was apparently unfairly targeted by the Hawks and that while a syndicate was behind the alleged tax scams, the syndicate members were not arrested.

The judge has said that the allegations made by Mohan, including that the Hawks investigations were ‘selective’, were viewed as very serious.

“The burden of proof is on the complainant (Mohan) to provide the necessary evidence of the serious and unlawful infringement of his rights arising from an investigation done by a member of the DPCI.

Judge Moosa said he had directed Mohan’s complaint to the national head of the DPCI but that the matter was referred to SARS for investigation in terms of the protocol which existed between the two entities.

“After SARS completes its investigations the matter will be referred back to the DPCI to take further steps, if necessary.

“The DPCI has requested that the complainant (Mohan) approach the prosecuting authority to postpone the case pending the outcome of the investigations,” he said.

“A copy of the report of the findings will be sent to the minister of finance for his information, action and record. Mohan will also be informed of the findings.”

Helen Templeton, a specialist in the SARS litigation unit, said in an opposing affidavit in the Durban High Court (concerning the constitutional challenge application) that the tax authority had been alerted in May 2012 that R210 952 386.96 had been deposited into Govender’s bank account.

“After Standard Bank sought authorisation from SARS, SARS’ criminal investigative unit in Durban conducted investigations.

“There appeared to be additional fraudulent refunds and collectively SARS was prejudiced of R235 009 664.62,” she said.

Govender’s application is being opposed by SARS, the minister of finance and the Directorate of Public Prosecutions.