Taxman cracks the whip on Steinhoff-siphoned Wiese

CAPE TOWN — Either it’s a shotgun approach by SARS in the hope of knocking a few lucrative feathers off Steinhoff-siphoned billionaire Christo Wiese, or Wiese is involved in an almost standard corporate tax dodge – or any number of permutations in between. Wiese is adamant that he’s not liable following the machinations of former executives at law firm ENSafrica and that it’s a matter for them and the tax man, but the latest development is another blow to the public image of one of South Africa’s most prominent entrepreneurs whose wealth was severely trimmed by his involvement with the now-infamous Steinhoff company. The tax man wants R217 million from Wiese and three ENSafrica executives and the matter has somewhat unusually landed up in open court, presumably after the normally confidential tax conflict resolution measures failed. Journalists at the amaBhungane Centre for Investigative Journalism broke the story and will now be scouting to find a way around the suddenly tight-lipped taxman and probing Wiese’s public rebuttals. Wiese was already more than holding his own with veteran journalist Stephen Grootes on the SAFM Sunrise radio show on Friday. This story promises to deliver several more twists and turns. – Chris Bateman

By Ana Monteiro and Janice Kew

(Bloomberg) – South Africa’s tax agency filed a legal claim against local billionaire Christo Wiese and former executives at law firm ENSafrica for more than R217 million ($16 million) in unpaid taxes, court documents show.

The papers filed in the Western Cape High Court is part of a wider R3.7 billion claim by the South African Revenue Service, according to a report in the Financial Mail published Thursday. ENSafrica created a tax structure to help pan-African crude-oil explorer Tullow Oil Plc shift assets valued at R3.9 billion out of the country, dodging taxes in the process, the Johannesburg-based magazine said. The story was written by journalists at the amaBhungane Centre for Investigative Journalism.

File Photo: Christo Wiese pauses during a Bloomberg Television interview at the Pepkor Holdings Pty Ltd. offices. Photographer: Waldo Swiegers/Bloomberg

SARS claimed ENSafrica restructured Tullow, leaving it in charge of a South African company that was a tax shell, and then sold this on to Wiese and his Titan group, the magazine reported. Wiese then allegedly moved assets out of the company and sold it to a former ENSafrica executive who told the tax agency there weren’t any assets or cash to claim, it said.

Wiese and the three ENSafrica representatives should pay the R217 million personally, according to the court documents.

Legal advice

“Titan had nothing to do with the restructuring and gained no tax benefit,” Wiese said by phone Thursday. “I will be taking legal advice on whatever is misleading. The restructure has nothing to do with me; this is a SARS and ENS matter.”

SARS can’t comment on the affairs of taxpayers, it said in an email. Tullow declined to comment.

An entity related to ENSafrica bought one of the group companies involved in the Tullow restructure in 2007 and this was subsequently sold to Titan in the same year, ENSafrica said in an emailed statement.

ENSafrica and its affiliates have, “at all times, complied with all the requirements of the relevant tax laws,” the firm said. SARS “has all the relevant facts in relation to the role of each of the advisers, including the role of our firm and our affiliates. SARS has not sought to impugn the role of any of the advisers, including ourselves, arising from these transactions.”

Christo Wiese implicated in alleged multi-billion tax evasion scheme responds on eNCA

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