Billionaire Shuttleworth back in court to recoup millions

BILLIONAIRE venture capitalist Mark Shuttleworth returns to court this week, demanding the Reserve Bank repay more than R250 million it levied against him when he moved some of his assets out of the country.

On Thursday, the Welkom, Free State-born Shuttleworth heads to the Supreme Court of Appeal (SCA) in Bloemfontein to argue the decision by North Gauteng High Court Judge Malesela Legodi to dismiss his claim in July last year.

Shuttleworth’s lawyer Richard Glyn confirmed the matter would be heard on Thursday.

He paid the levy under protest after exporting his capital to the Isle of Man, where he lives, according to court papers.

At the SCA, the Reserve Bank is also cross-appealing the legal claims Shuttleworth won.

The Constitutional Court struck the matter off its roll in August last year “in view of the determination of certain aspects of this matter in the SCA”.

The Reserve Bank, which will be represented at the SCA by top senior counsel Jeremy Gauntlett, says the levy is authorised by law.

South Africa’s central bank also argues that the levy was not an impermissible exercise of fiscal power, but to control capital outflows and promote macro-economic growth after the global financial instability of 2008.

Then finance minister Pravin Gordhan and the Reserve Bank were granted leave to appeal against the order granted in Shuttleworth’s favour in September last year.

Shuttleworth was hit with the levy after moving R2.5 billion out of the country through Standard Bank.

Shortly after emigrating in February 2001, his assets worth nearly R4.3bn were blocked, but the businessman was granted permission to expatriate R1.5bn in November that year.

While in South Africa, Shuttle- worth started the HBD Investment Trust and HBD Business Trust, through which he moved his South African assets.

At the high court, Legodi dismissed Shuttleworth’s attempt to have parts of the 81-year-old statute, the Currency and Exchange Act, the 53-yearold Exchange Control Regulations and two 2003 Exchange Control Circulars declared unconstitutional. Some believe the 1961 Exchange Control Regulations were promulgated after the Sharpeville Massacre of anti-apartheid protesters.

Shuttleworth, who turns 41 next month, succeeded in the North Gauteng High Court in having some parts of the Currency and Exchange Act and the two circulars declared unconstitutional.

These include parts of the act that empowered Reserve Bank governor Gill Marcus to suspend currency, banking and exchange laws in conflict or inconsistent with other statutes.

Legodi found the section of the act invalid, inconsistent with the constitution and struck it down subject to confirmation by the Constitutional Court.

The high court judge also declared part of the Exchange Control Regulations invalid and inconsistent with the constitution in that it violated the freedom of trade, occupation and profession clause.

Legodi suspended the declaration of invalidity for a year to enable Gordhan to correct the cause of constitutional invalidity.

Also declared inconsistent with the constitution and invalid were sections of the regulations that violated Shuttleworth’s privacy, freedom of expression and freedom of movement and residence.

However, Shuttleworth failed in his bid to have the entire Exchange Control Regulations declared inconsistent with the constitution and invalid.