Hudaco: Sars settlement shoots up share price

Published Jan 26, 2015

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HUDACO’S JSE share price skyrocketed by as much as 18 percent on Friday after the company announced that it had reached a settlement with SA Revenue Service (Sars). The settlement was for an amount of R312 million after the taxman concluded that the leveraged black economic empowerment (BEE) structure put in place in 2007 was a scheme designed to avoid tax. The settlement figure is a lot less than the contingent liability for the worst case scenario, including penalties and interest up to that date, that Hudaco put at R1.4 billion in May last year. The listed industrial and automotive products distributor had already paid R120 million under the “pay now, argue later” provisions and would pay the balance of R192m in March, the company said. Hudaco’s shares on the JSE touched R109.90, which was the stock’s best level since January 28 last year. The share finished Friday 16.13 percent higher at R108.

Hudaco said its basic and headline earnings for the year to November would take a hit due to the Sars tax settlement. – Nompumelelo Magwaza

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