The SA Revenue Service (Sars) has launched an investigation into Sharemax Investments and lodged claims totalling about R17.5 million against the property syndication promotion and marketing company.
Sars spokesman Adrian Lackay confirmed that it was investigating the scheme and had lodged claims totalling about R17.5m related to Sharemax’s scheme of arrangement and offer of compromise to shareholders in terms of the Companies Act and its business rescue process.
However, Lackay stressed “details of both investigations have not been divulged in the public domain from a Sars perspective” and further comment could not be made at this stage.
Dominique Haese, the former financial director of Sharemax Investments and now the managing director of Frontier Asset Management, which manages Sharemax’s property portfolio, initially said on Monday that she was not prepared to comment on “these things”, demanded that her name not be mentioned and then ended the call.
However, Haese phoned back almost immediately, stating that the R17.5m claim against Sharemax for the scheme of arrangement was “an incorrect statement”.
“Please don’t print an incorrect statement,” she said before again ending the call.
Financial advisory and intermediary services ombud Noluntu Bam said last month that an investigation by her office had “pierced the corporate veil” of how Sharemax operated and concluded it was “nothing more than a Ponzi scheme” with investors paid interest out of their own funds.
This followed Business Report reporting in October last year that the Hawks were investigating allegations that Sharemax committed fraud.
In a determination about an investment made by a Pretoria pensioner in Zambezi Retail Park, a property syndication scheme promoted and marketed by Sharemax, Bam ordered Sharemax directors Haese, Willem Botha, and Andre Brand, together with a financial adviser and other entities linked to the investment, to jointly repay Gerbrecht Siegrist R580 000.
Asked to explain Sars’ interest in Ponzi or pyramid schemes, Lackay said Sars focused on any profit making enterprise in any form where persons or entities were obliged to register for tax, submit returns and pay income tax.
“Ponzi and pyramid schemes themselves are by their very nature intended to generate income regardless of the fact that they are illegal,” he said.
Lackay said the so-called Krion case was a good example of how Sars executed its statutory mandate, adding that in this case the masterminds of the scheme were convicted and sentenced for failing to submit returns and pay tax on income derived from the scheme.
The same principles applied when investors turned a profit and failed to comply with their tax obligations, he said.
The Krion Financial Services pyramid scheme raised about R1.5 billion from about 10 000 investors before it was liquidated in July 2003.
About 40 000 people have invested a total of about R4.5bn in the schemes promoted and marketed by Sharemax.