Print Page
News & Press: Opinion

The last word: A tale of greed, tax and a missing R12m

Monday, 23 June 2014   (0 Comments)
Posted by: Author: Rob Rose
Share |

Author: Rob Rose (BDlive)

The murky story behind the sudden resignation of the Financial Services Board’s (FSB) Dawood Seedat is the most lurid one to hit the business pages since Jeff Wiggill was found gunned down on a road near Soweto last year.

It is a story in which the chief protagonist is a shady 63-year-old cash-and-carry tycoon named Edrees Hathurani. And it proves just why, if you climb into bed with the wrong sort of partner, you can get all sorts of nasty infections.

Seedat — smooth, smart and savvy — was a rising star at the FSB, which regulates all companies besides banks that take cash from the public, from pension funds to JSE-listed investment companies.

Until last week, that is, when Seedat walked into CEO Dube Tshidi’s office and resigned.

The reason for his impromptu departure shows that while greed is a revered commodity in capitalism, it can also brutalise careers.

This story also ladles a generous dose of oil on the fire that fuels the FSB’s many critics — such as former Fidentia boss J Arthur Brown, against whom Seedat testified.

The narrative — gleaned from court papers, affidavits and rampant chatter in the halls of the FSB’s cookie-cutter office park on Pretoria’s eastern flank — is this.

At a wedding last year, Seedat bumped into an accountant friend, who mentioned that he’d got a number of clients in need of "consulting” services.

One of these clients was Edrees Hathurani — the man who runs Africa Cash n Carry, a 112,000m² warehouse-style operation on Johannesburg’s Main Reef Road that makes more than R5bn a year peddling more than 15,000 products from homeware to cosmetics.

Hathurani, it turns out, had diddled the taxman out of a few million (more than R1bn at last count) running as far back as 1983. He was also in the middle of an epic battle with the South African Revenue Service (SARS), as well as his former business partner, Cassim Aysen.

(Court papers show Hathurani signed a settlement with SARS for about R200m in 2007 — which the taxman cancelled on the basis he hadn’t made full disclosure.)

Anyway, Seedat’s accountant friend persuaded him to meet Hathurani at a restaurant called Calisto’s in Johannesburg’s Fordsburg to discuss working for him.

Seedat wasn’t sure; Hathurani’s reputation preceded him after all.

But the tycoon was so desperate to get Seedat on board that, in the middle of last year, the accountant go-between delivered R250,000 to the FSB’s offices as a sweetener.

The banknotes must have sung a pretty tune. Seedat then signed on as a "consultant”, ostensibly to work on Hathurani’s case against Aysen.

Many meetings followed — and forget Melrose Arch or the Hyatt: they met at such lowbrow venues as the Spur restaurant and Calisto’s as well as Midrand’s Turkisk mosque.

Seedat, his supporters argue, was specifically not hired to help Hathurani on tax. This made sense because, while Seedat worked at SARS until 2005, he hadn’t been there for years.(Interestingly, Seedat knew Fidentia curator George Papadakis, who worked at SARS at the time and signed off Hathurani’s audit).

(Interestingly, Seedat knew Fidentia curator George Papadakis, who worked at SARS at the time and signed off Hathurani’s audit).

In all, Seedat was paid R3m in "consulting fees” by Hathurani.

This is important, because the claim against him is that Seedat was paid R12m — cash he presumably was meant to use to pay off people at SARS, such as Papadakis.

The thing is, Hathurani’s tax problems didn’t vanish. So Hathurani began sending Seedat text messages, asking pointed questions about the whereabouts of the R12m.

Seedat was spooked. He’d never seen that R12m, he claimed.

This infuriated Hathurani, who evidently threatened to leak a "video” he’d taken at the Turkish mosque last November as "insurance” — a video in which Seedat is seen taking boxes, supposedly containing cash.

It is this video that has now been circulated — even though you don’t actually see cash changing hands.

But, for one thing, Seedat was paid part of his R3m "consulting fee” at this mosque. Secondly, Seedat’s argument is that those boxes contained only court papers on that day.

It seems there are two scenarios: either Seedat extorted R12m from Hathurani to "fix” a tax case, or someone else in the chain took the cash. There is actually a third option: Hathurani could have manufactured the "extortion” claim to argue that the entire tax case is poisoned.

It’s tricky to say right now which.

One thing is clear: Seedat’s greed got the better of him. Hathurani wasn’t the straw to clutch at — it was the one that broke the camel’s back.

This article was first published in Sunday Times: Business Times.



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.

  • Tax Practitioner Registration Requirements & FAQ's
  • Rate Our Service

    Membership Management Software Powered by YourMembership  ::  Legal