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AMABHUNGANE

Sasfin’s existential can of worms and the risk to other banks

Illustrative image | Sources: SARS Branch (Photo by Gallo Images / ER Lombard) | SA banknotes. (Photo: rawpixel) | Sasfin. (Photo: rawpixel)

The SA Revenue Service confirmed last week that it is suing Sasfin Bank for just shy of R5bn – more than half the bank’s balance sheet. The claim stems from billions channelled offshore via the bank by a coterie of alleged money launderers. A few other banks should be worried too.

The SA Revenue Service’s (SARS) shock claims against Sasfin Bank stem from billions in payments made by several companies, some of which have previously featured in amaBhungane’s reporting on the local and regional money laundering industry.

In December SARS quietly lodged two damages claims in the Gauteng Division of the High Court in Pretoria: one for R1.97-billion, involving 18 named companies, and another for R2.9-billion, involving Gold Leaf Tobacco Corporation, which is controlled by Zimbabwean tobacco baron Simon Rudland.

The suit was first reported by Daily Maverick.

Aside from Gold Leaf, a number of the other 18 entities listed by SARS have ties with either Rudland or gold smuggler Andries Greyvenstein, their associate Howard “Howie” Baker, and the duo who facilitated many offshore payments for them – Mohamed Khan and his partner Sohail Jiwani, now deceased.

Some have previously featured prominently in amaBhungane’s reporting.

Read more in Daily Maverick: Gold Leaf Tobacco: SARS claims billions from Sasfin in Rudland money laundering debacle

Some of the other named entities have also been implicated in laundering funds derived from State Capture for the Gupta family and their associates.

The SARS claims stem from enormous tax debts SARS alleges are owed by the various entities, which cannot be recovered because, in SARS’ view, Sasfin helped put assets out of reach offshore on the back of seemingly fake documents, many allegedly supplied by Khan. 

Four Sasfin employees have been singled out by SARS as having aided the alleged scheme.

While the claim will certainly be defended, SARS’ demand of R5-billion potentially represents an existential threat to Sasfin, which, as of the end of last year, had total assets of R9-billion.

Sasfin said in a statement it had received legal advice that SARS’ claims were without merit.

“The legal opinion is unequivocal that the claim falls outside of the recognised parameters of applicable law and has a very remote likelihood of success,” said the bank.

The move against Sasfin is likely an attempt to test the legal waters and could be just the beginning.

AmaBhungane has already established how some of the entities mentioned in SARS’ particulars of claim did precisely the same thing at a number of other banks, paving the way for essentially identical cases against both small and major financial institutions.

Here is what we know about some of the entities that, if SARS has its way, Sasfin will have to answer for.

First off, there is Gold Leaf, which (using agents) deposited and then sent offshore a staggering R2.9-billion “which was not declared to SARS”.

This scheme has been exposed before and SARS’ particulars of claim emphasise that the bank itself had already flagged Gold Leaf as “high risk” in 2016, and, in September 2017, flagged 10 specific dodgy transactions. 

AmaBhungane previously reported on these transactions, which involved fake invoices – ostensibly for cigarette-related goods –  justifying payments to Aulion Global Trading – a Dubai company owned by Howie Baker – as well as other fronts, including one belonging to Andries Greyvensteyn. (See here.)

Even after a brief internal investigation confirmed that these transactions were “fictitious, fraudulent, alternatively based on incorrect documentation and information”, it still took two months for Sasfin to close down Gold Leaf’s account, says SARS.

SARS wants Sasfin to cough up the entirety of this R2.9-billion to help settle a R4.46-billion tax debt that Gold Leaf was assessed for. SARS claims Sasfin is liable for negligently allowing the R2.9-billion to be illegally exported.   

While Gold Leaf’s operation at Sasfin is already well known, many of the 18 other companies on SARS’ hit list are more obscure. Although together these companies exported R5.3-billion through Sasfin, SARS is only coming after the bank for their tax debts, which amount to R1.97-billion.

Actinic Holdings was a short-lived vehicle which, according to SARS, paid a total of R51,287,983 into its Sasfin account in 2019. This company was the subject of an amaBhungane exposé, which showed how it was set up as a front for money laundering that took place not only via Sasfin but also via other banks, including Bidvest, the defunct Habib Overseas Bank and Mercantile.

Data at amaBhungane’s disposal shows that Actinic moved another R114-million through accounts at Bidvest, Habib and Mercantile, making clear the potential threat to other banks should SARS succeed with Sasfin.

Another company cited by SARS has likewise been probed by amaBhungane and similarly poses a threat to more than one bank.

Putzmeister SA, according to SARS’ particulars of claim, received deposits totalling R67.9-million at Sasfin. We previously reported how this company was used to expatriate money through an innovative scheme involving a manufactured court order for a debt repayment.

The company is a local subsidiary of a German group dealing in heavy construction vehicles, but its local chief executive went rogue, allegedly colluding to fabricate a R67-million “debt” enforced by a sham court order which was presented to banks’ forex departments to justify offshore payments.

This court order was apparently recycled at other banks to justify duplicate payments.

And then… the Guptas

There are three entities linked to the externalisation of funds derived from State Capture and the Gupta family’s operations.

These are Zokubyte, Coral General Traders and Varlozone.

In research submitted to the Zondo Commission by researcher Paul Holden, Zokubyte and Varlozone were flagged for relatively small amounts sent out of South Africa.

Coral was flagged separately in Al Jazeera’s Gold Mafia documentary as a conduit for Gupta money.

The Holden report given to Judge Zondo found that Zokubyte had, among other things, received more than R9-million from a company called Saamed Bullion Group, which was a conduit for State Capture funds.

Zokubyte would in turn fund Varlozone and both would send money abroad via Sasfin.

SARS says the three companies moved R15,754,114, R29,585,441 and R26,741,514 respectively through Sasfin – far more than Holden managed to pin on them.

It is unclear who controls Zokubyte, although Al Jazeera claimed that Khan was in charge of Coral’s transactions – something amaBhungane has not independently established.

The accountant’s mailbox

Two more companies listed by SARS, Lone Eagle General Traders and Ocean Twelve General Trading, were responsible for R90-million and roughly R2-billion respectively in exported cash – the latter being the single biggest amount coming from any one of the companies outside of Gold Leaf itself.

The post office box used by both belongs to an accounting firm, since deregistered, called Amigge & Associates, which listed auditor Ahmed Mohamed Igge as its director.

All attempts to reach Igge on his known numbers were unsuccessful and it is understood he may be out of the country.

Igge was also the listed auditor of a company called PKSA Finance – the main vehicle used by Khan and the late Jiwani to channel money through banks other than Sasfin to an offshore company owned by Baker.

AmaBhungane previously reported on how PKSA moved nearly R600-million through the now provisionally liquidated Habib Overseas Bank, mostly to Aulion Global Trading in Dubai.

Khan declined to comment when contacted by amaBhungane.

A number of the companies listed by SARS have no obvious link to the tobacco and gold network, suggesting a broader laundry system used by a variety of players.

We will keep digging. DM

Gallery

Comments - Please in order to comment.

  • Smanga Z says:

    What I know about SARS is that they hardly lose court cases. They have a war chest bigger than total GDPs of some of our neighbouring countries! They use your tax money to find the best lawyers and beat you down till you “settle”…So good luck. The proverbial David vs Goliath is gonna be interesting to watch. I’ve had my run ins with SARS, they are like a dog with a bone.

  • Iam Fedup says:

    I don’t know much about Sasfin, but when it comes to money laundering and other illegal/immoral practices, the ANC-influenced SARS have turned a blind eye to previous scandals going all the way back to ABSA and others for a few decades. I would not be surprised to hear that this is an anti-Semitic campaign waged by the ANC, for the CEO and Chairman of Sasfin, unlike their cowardly colleagues from FNB, Standard Bank, ABSA, and others, have spoken out publicly about the gangsters in charge. So who would you believe? An entrepreneurial successful bank, or a bunch of ANC-backed scoundrels?

    • Abel Mngadi says:

      Two wrongs don’t make a right. Just because the government has been involved in corruption, these entities can do as they please? Your theory is unsubstantiated that this is antisemitism. Lame excuse. SARS must go for them if they did wrong. Luckily for Sasfin our law enforcement system is nonexistent. This matter should have been in court with Sasfin being charged for assisting these entities to money launder. If SARS can go for us ordinary taxpayers, why not Sasfin?

  • Richard Baker says:

    Long overdue that SARS begin these types of cases. Most of the banks in SA have aided and abetted such money movements and have not complied with FIC and SARB regulations. However, what about the principals themselves who appear to be escaping any censure or prosecution for tax avoidance and expatriating of funds.
    And noticeably-still not one of these statutory bodies have proceeded with state capture and corruption cases.
    Well done to the brave and inquisitive amaBhungane team and journalists-tragic for the nation that such people put their lives at risk to uncover these crimes whilst the authorities generally turn a blind eye.

  • Just Me says:

    Sasfin does need to get sued, but why did SARS not go after the other big banks for damages to the SA economy through the illegal repatriation of billions of funds through things like the Gupta dealings?

  • Rae Earl says:

    Cyril Ramaphosa sat on the Zondo Commission reports for months without allowing them to be released. He surely must be censured for aiding and abetting the money launderers by keeping a great deal of their criminal activities hidden from the public and lawmakers in general. Maybe he has something to hide himself?

  • Geoff Coles says:

    Just noting that Sasfin is Jewish controlled…. wouldn’t surprise me that’s a factor too.

    • Lucifer's Consiglieri says:

      Nothing like a bit of random anti-semitism thrown into the mix. How did this pass moderation? This highlights the inherent weakness in the DM reliance on reader moderation

  • Tim Price says:

    The SARS case will be able uphill battle to win. Their damages are too remote. Why havent they claimed the tax from the company that earned the income? SAsfin is a comparatively soft target.

  • Renn Moore says:

    I can think of no more deserving organisation to receive a little TLC from SARS and all other regulatory authorities in South Africa. Their business model (“scams”?) deserves to be reviewed by the competitions commission also.

  • Geoff Coles says:

    The direct guilt surely are named individuals in SA, Zimbabwe and Dubai, and their businesses, the usual suspects, who should have been prosecuted by SAPS and the NPA

  • Riaan Roux says:

    Within our non-existant judicial system Sasfin should be fine.

  • Charles Butcher says:

    Forget the instructions WHO’S MONEY WAS IT they are the real criminals, probably mostly affirmative action bbeee tenderpreneurs and top anc governmunt officials

  • Johan Buys says:

    Somebody should also have a look at the compliance of the banks from which accounts the money flowed into SASFIN. One’d imagine that the billions did not arrive in pallets of cash. Somewhere along the line of revenues sourced from illegal tobacco and/or gold there is probably a significant amount of physical cash. How did that conversion work?

  • FarFrom TheCrowd says:

    This seems similar to some cases SARS has brought to have repairs and maintenance on buildings reversed as income (recoupment) on sale of said building – all have been lost as there is no basis in law or in fact, but at cost to taxpayers. And even if SASFIN wins this case, they will still have legal expenses which are not tax deductible, so shareholders pay, and given that the JSE is tightly traded, pension funds and medical aids invested in the bank, will pay. And if SASFIN gets a cost award, taxpayers will pay. Either way, SARS is free to pursue this type of spurious nonsense at no cost to whoever thought up this rubbish. Or maybe SARS is hoping for a settlement to raise some cash in an underhand manner. And how is it that SARS is so willing to discuss SASFIN’s affairs, but not those of a certain Zuma? SARS is just as corrupt as the government it funds.

  • Lo-Ammi Truter says:

    I am rooting for Mr Kieswetter. He is the only one addressing these criminal enterprises, it seems. Go SARS!

  • anton kleinschmidt says:

    Editor. I see comments where accusations are made against banks without providing evidence to back up these claims. Such claims are often made anonymously. This is crazy stuff because nothing is to be gained from undermining our banking system. To collapse one of the big banks is to collapse the country and impoverish millions.

  • Dermot Quinn says:

    SARS seem to have hired commission based reps, they have gone off-script, perhaps the legal costs will bring them back in line….
    The market cap of Sasfin is less…
    The taxman has become a negative economic contributor to SA.
    Call it in CR, now.
    Talk about a dysfuntional SA.

  • theresa burdett says:

    Quite frankly I got uphill and downdale trying to send zar to a British company that offers far better rates than our banks do. Time to look at the rates our banks offer because why can I get a better rate in Britain than in SA? I gave up in the end because I just could not do it without a proper invoice which was impossible as I was sending birthday and Christmas money to the children. Our banks have a lot to answer for to ordinary SA citizens as they make it very expensive to send money overseas for the ordinary man in the street. As far as SARS is concerned they woke up too late and now want to sue for tax from an entity that is not owing them tax. I doubt that is going to work. If they would concentrate on companies sending money overseas instead of normal tax payers it would he far more beneficial to them. Instead they audit us to death. Even as a salary earner I was audited every year because of money I saves into a retirement annuity. Now I get to be a provisional taxpayer just because I get a bit extra in interest on savings. Either way you can’t win. So if you take all this effort on auditing people whose info is submitted by companies that automatically load their info and expend it on money flowing out the country they might collect tax from companies that duck and dive sars by sending funds overseas. Or ANC caders.

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