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SA authorities eye cash in offshore tax havens‚ Fidentia ‘missing millions’ amid #PanamaPapers leak

05 April 2016   (0 Comments)
Posted by: Author: Ernest Mabuza
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Author: Ernest Mabuza (Times Live)

Curators are taking legal advice after the #PanamaPapers leak that showed hidden accounts linked to the Fidentia fraud‚ while the South African taxman is keeping a watch on unfolding leaks of companies and individuals using offshore tax havens.

The South African Revenue Service (SARS) said on Monday it would act in a responsible and appropriate manner to deal with South African citizens who have been mentioned in the Panama Papers that detail the level of tax avoidance across the world.

The tax entity’s spokesman Sandile Memela said on Monday SARS was a signatory to international conventions‚ including those relating to exchange of information programmes.

Memela said SARS would– when the information becomes available – analyse the information to act in a responsible and appropriate manner.

"However‚ we need to bear in mind that SARS is not allowed to comment or divulge information on any taxpayer’s affairs‚” Memela said.

Khulubuse Zuma‚ who is President Jacob Zuma’s nephew‚ was named in the leak of documents held by Panama-based law firm Mossack Fonseca as being authorised to represent Caprikat Limited‚ one of two offshore companies that controversially acquired oil fields in the Democratic Republic of Congo.

Zuma’s spokesman Vuyo Mkhize told TMG Digital that the information was a matter of public record in South Africa.

Among the SA-linked companies named so far in the Panama Papers are Pam Golding Properties‚ which they said had set up "seven offshore companies domiciled and registered in a tax haven of the British Virgin Islands” for the president of the Court of Appeal in Botswana. It was not evident that there was any impropriety in the setting up of these companies.

But the papers could potentially help trace the so-called missing millions that beneficiaries of one of the biggest white collar crimes in the country have been trying to find since 2006.

The Mossack Fonseca’s documents showed that at least two of the men involved in the Fidentia fraud used the firm to create offshore companies.

Mossack Fonseca’s records on the Fidentia case show Graham Maddock paid Mossack Fonseca $59‚000 in 2005 and 2006 to create two sets of offshore companies‚ including one called Fidentia North America. Mossack Fonseca also created offshore structures for Steven Goodwin‚ a man that prosecutors later claimed had played an "instrumental role” within the Fidentia swindle. Both men were jailed for the fraud at Fidentia‚ along with the former CEO J Arthur Brown.

Fidentia’s co-curator John Levin told TMG Digital on Monday that the Financial Services Board had been in touch with him to try and find out what he could do about this information.

Levin said he had sent an email to his co-curator George Papadakis to find out whether this issue was dealt with in the earlier forensic reports. Levin was only appointed in 2014.

Levin said he did not have experience on how to set up verifying the facts and‚ if there was money offshore‚ how to repatriate it.

"I am seeking legal advice on that‚” Levin said.

An estimated R1.2-billion was misappropriated in the Fidentia scandal.

More than 60‚000 people‚ including widows and orphans of mineworkers who were beneficiaries of a Fidentia-controlled trust‚ were affected. Many were left bereft. Equally‚ the Transport Education and Training Authority lost the ability to fund its training programmes.

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Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.


The Act requires that a minimum academic and practical requirments be set to register with a controlling body. Click here for the minimum requirements of SAIT.

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