Aussie taxman after Abe Krok’s sonComment on this story
You can run, but you cannot hide from the taxman – wherever you are, he will catch up with you.
This is a lesson billionaire Mark Krok – son and heir of the late Abe Krok, who was one of South Africa’s richest men – is learning.
Abe and his twin brother, Solly, made their fortune during the apartheid era when they sold controversial skin-lightening creams. The business slowed following complaints about the product’s side effects. The twins then expanded their fortune by investing in the Gold Reef Company, which later merged with the Tsogo Sun.
Mark Krok became an Australian resident in April 2002. He lived there until December 2008, when he emigrated to the UK.
The Australian Taxation Office is now on his trail, saying he owes more than AU$25 361 875 in taxes.
In 2012, the Australian commissioner asked the South African Revenue Service (Sars) to assist it in collecting the taxes owed by conserving Krok’s assets in South Africa, pending collection of the amount it said Krok owed.
Some of Krok’s assets remained in South Africa as he could not legally move all of them.
These assets were blocked under South African exchange control regulations.
Sars agreed to assist the Australian Taxation Office, in terms of a memorandum of understanding between the two countries.
Last year, Sars obtained a Pretoria High Court interim order to preserve Krok’s assets, which included a large portfolio of shares in the Johannesburg Stock Exchange, two Cape Town properties and a car.
A curator was appointed to take control of the assets. Krok was ordered to disclose all his other assets and sources of income in this country to the curator. The order was to ensure he could not dispose of any of these assets before his bill with the Australian Taxation Office was settled.
On Friday, Judge Hans Fabricius confirmed the interim order and ordered Krok to foot the legal bill, which included the fees of six senior advocates who argued the case.
The Australian Taxation Office said Krok owed it taxes for the income years 2004 to 2009. He was required to declare all income derived from all sources, inside or outside Australia. The office said he had not done this.
Counsel for Krok advanced a technical defence based on the interpretation of the protocol between South Africa and Australia in terms of which the two countries would assist each other with tax collection and asset preservation.
Sars had told the court it was significant that Krok had not given any undertaking not to dissipate any of his South African assets.
The Australian Taxation Office said that after leaving South Africa, Krok made numerous applications to the SA Reserve Bank to release some of his blocked assets. It is said he dipped into these to support his parents and pay stipends to former domestic employees and for holidays.
He required R40m of these assets to buy a home in Clifton, and R5million to furnish it and buy a car.