Dave King’s first interview after his R706m settlement with SA Revenue Services

Over the past 10 years, serial entrepreneur Dave King and SA Revenue Services have traded insults, publicly and privately. They also flirted with settlements a couple of times – including once when King claimed to have a signed agreement but SARS said the official who concluded it was not entitled – and was duly suspended. So Thursday afternoon’s joint media statement from the parties was a surprise. First because the settlement was far below the R2.7bn the tax court had awarded in SARS’s favour. And secondly because of the suddenly humble, extremely accommodative language attributed to King. The former tax fugitive maintained media silence after the announcement. So we were delighted to have him to chat to us on CNBC Africa’s PowerLunch on Friday. This was the first time King spoke publicly after the record settlement. Here’s the interview. – AH 

To watch the video of the full interview, click here.

ALEC HOGG: Dave King is on the line with us. Nice to talk to you, Dave. I believe you were partying last night.

Dave King: As this pic from scotsman.com shows, the serial entrepreneur makes news wherever he goes.
Dave King: As this pic from scotsman.com shows, the serial entrepreneur makes news wherever he goes.

DAVE KING: Ja, I must say I did have a little bit of a party with my legal team in particular. As you know Alec, you’ve been involved in this matter for a long time, It’s been many, many long and difficult years. We did feel it quite appropriate after we left the court to go and have a little party.

ALEC HOGG: I was trying to work it out. It goes back to Specialised Outsourcing 17 years ago, but when did you start with the legal challenge?

DAVE KING: The issues with SARS arose around about 2000, so that’s 13 years ago. But from a litigation point of view in terms of the public eye and where you were probably perhaps first informed was 2002 when SARS got our first attachment order against our South African assets, so that’s over 11 years of high-profile litigation.

ALEC HOGG: How do you come to a figure of R706m? Clearly there would have been a lot of negotiation, but there must have been some rationality to it?

DAVE KING: There was no calculation as such to say ‘we came to a specific number’, it was very much a negotiation. There was an element of it. And where we really got to a figure was when I in fact started to engage seriously with SARS probably from about 2010. I found during the course of that exchange, as I started to give SARS some more information and SARS had a very, I think positive interaction with me. So despite the litigation, SARS was saying to me ‘David if you actually come clean and share everything with us; we know you haven’t done it up until now .’ I think it was fairly obvious there were criminal charges. There was a lot going on and I was just very determined to keep a tight lid on the information flow. But what I found was once I opened up to SARS and they started looking for information – started getting more information from me – we were able to refine and get a number of things I think that SARS thought…what was fair to the State and I thought was fair in the amount of tax that I should pay.

ALEC HOGG: You’re pretty contrite in the statement that came out last night saying that it was a mistake not to cooperate. Very different from the earlier Dave King.

DAVE KING: Yes. I think, as I was saying a couple of moments ago,

when this whole thing started in 2002 I adopted a bit of a siege mentality. I saw it as an onslaught.

There were criminal charges and fraud allegations. There were exchange control issues and I really kind of took this onslaught approach. And I was genuinely – in fact very, very pleasantly surprised, when I did engage with SARS. They were tough in their negotiations, but I did find they were fair. They were open and if I look back, it is something that I regret that I didn’t do sooner.

ALEC HOGG: You also say you will be filing all the tax returns from your family. How many are outstanding?

DAVE KING: I’ve not filed any tax returns since 2002, so it’s about 11 years of tax returns I’ve got to get up to speed with.

ALEC HOGG: That’s a lot of work.

DAVE KING: There’s still a bit of admin to be done. We’ve got to the settlement which is the most important thing. There’s still quite a bit of paperwork that I’ve got to put in place, and it does involve me restructuring parts of my agreement with SARS with SARB. I’ll completely regularise my affairs; not only my tax affairs but exchange control compliance. It means a lot of assets that were previously held in offshore trusts, will now come into a South African Trust. So there’s more to this situation than really a financial statement. I have given an undertaking to the State. I’ve got this new chance. I will get my affairs in order and I will just make sure that I maintain a level of absolute total compliance and transparency going forward. It’s nice in a way to have a clean slate going forward.

ALEC HOGG: Dave, two other issues that I’d like to touch on briefly. First of all: Rangers Football Club, the great love of your life I suppose, outside of your family. You’ve been a director of the club. It has gone through all kinds of difficult times lately. Now that you’ve got this monkey off your back, are you going to be able to focus and maybe help rescue it?

DAVE KING: It’s something that’s on my mind. In fact I have had discussions over the last couple of months with the club, They will need some more funds. I’ll be interested in putting additional funds in by way of a rights issue, but what I’m not keen to do, is an acquisition of existing shareholders where the money goes to them and not into the club.

ALEC HOGG: You’ll get a lot of Scotsmen very happy to hear that news. And MICROmega, your company listed on the JSE, you did take over as the executive chairman a while back. The share price was up 27% yesterday. A potential Specialised Outsourcing?

DAVE KING: Well, I think if one looks at MICROmega, we have actually done quite a lot of work with the group. The unfortunate thing that MICROmega has had hanging over it for the last number of years, was SARS attaching the shares. So both from an employee perspective and from a shareholder perspective, people were saying ‘if I get involved with a share or I do this or I do that, is it possible the shares can then be taken away?’ So I think it is really good news from a MICROmega shareholder’s point of view and an employee point of view. I think as Adrian Lackay (or SARS) said in his interview, it gives me time to go forward with MICROmega. We’ve got a lot of value in the group. I declined an offer – an unsolicited offer – about two months ago to buy one of our South African subsidiaries for a value that’s over twice the market capitalisation of the company. So we understand that there’s strong inherent worth there. But as I say it really was seriously affected by the overhang of the SARS issue. From an internal point of view, we can now grow. There’s a lot of good things happening in the group, and I can now focus on MICROmega. I’m hoping for some pretty strong results from the group over the coming years.