By Chris Steyn

Former Eskom employees who facilitated procurement fraud, as well as people involved in the diversion of high-grade coal were targeted today (Thursday 12 October) in a “massive” inter-governmental search-and-seizure operation across five provinces.

The operation was carried out to break a “sophisticated criminal syndicate of alleged coal-smugglers, who played a major role in exacerbating the energy crisis and loadshedding”.

This was confirmed in a statement by The South African Revenue Service (SARS) which was the lead agency in the operation.

This after SARS obtained information regarding a host of tax crimes allegedly committed by members of the coal-smuggling syndicate, including non-registration for Income Tax, VAT and/or PAYE; failure to submit tax returns; under-declaration of income; claiming undue VAT refunds; and making false submissions (fraud).

In his comment, SARS Commissioner Edward Kieswetter said: “It is because of such naked greed that the country has experienced unprecedented loadshedding, which harms business, undermines foreign direct investment and leads to job losses – all of which negatively affect revenue collection.

“All law enforcement agencies must continue their aggressive fight against criminality, each according to its mandate. For its part, SARS will continue to pursue taxpayers involved in intentional and wilful non-compliance – without fear, favour or prejudice.”

Kieswetter commended the country’s law enforcement agencies for the “massive breakthrough” in ongoing investigations.

In its statement, SARS said the success of today’s operation was due to “exceptional” inter-governmental co-operation and information-sharing under the auspices of the NATJOINTS Energy Safety & Security Priority Committee “tasked with unmasking and bringing to book the criminals that have caused economic hardship and personal hardship to all citizens of the country”.

The nation’s tax collector added that it was such hard work, often behind the scenes, that led to these investigative breakthroughs and ensured that South Africans would return to “a lifestyle without loadshedding”. 

These targeted operations also helped to prevent the loss of revenue to the fiscus, which in this case amounted to more than R500-million.

According to SARS, the alleged coal-smugglers and their related entities are active and have a presence in: Gauteng; Mpumalanga; KwaZulu-Natal; the Free State and Limpopo.

“The sophisticated network of coal-smugglers is suspected to consist of local and foreign nationals. 

“Coal trucks destined for power stations are diverted to designated coal yards where high-grade coal is replaced with low-grade or sub-standard product. The high-grade coal is then exported or sold to willing buyers. The low-grade coal is often blended with scrap or other materials and then delivered to power stations.

“The low-grade coal damages the infrastructure at the Eskom power stations, which is a major factor in crippling the power utility’s ability to generate electricity for the South African grid.”

SARS said it was encouraged that the message from today’s operation was clear and unequivocal to all those involved in organised crime: “you will be hunted down and brought to book”.

Read also: