Mpisane documents admissible, judge rules

Independent Newspapers

If it had gone her way, tax fraud accused Shauwn Mpisane would have walked out of court a free woman. Picture:Marilyn Bernard

Durban - If it had gone her way, tax fraud accused Shauwn Mpisane would have walked out of court on Monday a free woman.

Instead, her gamble backfired and served only to strengthen the State’s hand in its case against her and her company, Zikhulise Cleaning Maintenance and Transport, on trial in the Durban Regional Court on 119 counts of fraud involving R4.7 million for submitting fake invoices and financial returns to the taxman.

“We were prepared for this… we do not feel defeated at all,” Mpisane’s attorney Phila Magwaza, told The Mercury.

Mpisane’s husband, S’bu, politely shook hands with prosecutor Meera Naidu, who had earlier received hugs from members of the investigation team.

The reason for their elation was magistrate Blessing Msani’s ruling as admissible documents that the State says are fraudulent.

It was a crucial ruling, the magistrate said before giving his decision, and one with “far-reaching consequences”.

“It breaks either party’s case,” he said.

“It could destroy the State’s case or do the same to the accused’s case.”

Giving the background to what became a protracted “trial within a trial”, Msani said Mpisane was facing two categories of charges.

The first was for submitting documents, including revised income tax statements for the 2008 year, that the State claimed were fraudulent, and the second for putting incorrect information on VAT returns for the 2009/10 tax year.

Msani said Mpisane had claimed that the 2008 documents had been submitted in terms of an alternate dispute resolution process, and the VAT documents during a voluntary disclosure process.

The rules of both, it had been argued, were that they were “without prejudice” and could not be used to prosecute her.

Msani said there was no disagreement between the State and the defence that there were confidentiality clauses in the Income Tax Act.

However, he said, “the big question” was whether these privacy provisions extended to cases where fraud was alleged.

He said just because the documents were being admitted into evidence now did not necessarily mean they would be accepted as the truth at the end of the trial.

“They will have to be scrutinised and subjected to cross-examination.

“They may still be rejected… but for the present purposes it is only fair and just that the State be allowed to leave the evidence,” he said.

He said he would give fuller reasons for his ruling at the end of the trial.

Mpisane has pleaded not guilty to all the charges, putting the blame for any false tax submissions squarely on the shoulders of her former bookkeeper, Kishal Reddy.

In a separate matter, Reddy has pleaded guilty to related crimes, but says he was acting on the instructions of Mpisane.

After Monday’s ruling, Naidu and Magwaza indicated that they would meet in February to attempt to eliminate some of the issues between them before the trial resumed in May.

Mpisane is also appear in court in Pinetown in February on charges of corruption and defeating the ends of justice charges arising from allegations that she persuaded a State witness to alter evidence. - The Mercury