Pretoria - The legal case by listed Hudaco to recover R490 million in secret profits and tax from its corporate advisers to a black economic empowerment (BEE) transaction is continuing.
Graham Dunford, the chief executive of the listed industrial, automotive and electrical consumable products distributor, confirmed this on Friday, but indicated the case was continuing slowly.
It instituted the legal action against Bravura Equity Services (BES), Cadiz Asset Management and others in 2015.
The legal action is aimed at recovering alleged secret profits of R180 million and the R312 million payment made by Hudaco to the SA Revenue Service (Sars) in settlement of a challenge under the general anti-avoidance rule and related to the financing arrangements for Hudaco’s empowerment transaction, which ran from August 2007 until February 2013.
The legal action followed Sars' concluding in 2013 that the leveraged BEE structure Hudaco had put in place in 2007 was a scheme designed to avoid tax, resulting in Hudaco facing a tax charge of about R500 million plus possible further penalties.
The group in 2007 sold 15 percent of all operating businesses, except diesel engine business Deutz Dieselpower, to the Hudaco Trading BEE Staff Education Trust, Hudaco Broad-Based Black Economic Empowerment Foundation and the Ulwazi Consortium.
Shares in Hudaco rose 11.45 percent on the JSE on Friday to close at R127.06.