JSE-listed banking and financial services group Sasfin placed two employees on precautionary suspension as it probes their relationship with cigarette producer Gold Leaf.
Sasfin Holdings CEO Michael Sassoon described the dealings that went on at the bank as ‘horrific’ in a radio interview on Wednesday morning.
This comes after the controversial cigarette manufacturer and its directors were slapped with a preservation order by the North Gauteng High Court following a South African Revenue Service (Sars) application.
The order will prevent the Zimbabwean-owned company from dissipating realisable assets and thereby frustrating the collection of taxes. Sars applied for the court to issue a preservation order after arguing that Gold Leaf Tobacco Corporation (GLTC) was part of the illicit tobacco industry which was cheating the taxman of his dues.
On Friday, Sars welcomed an order by the North Gauteng High Court granting a preservation order in terms of section 163 of the Tax Administration Act No 28 of 2011 against GLTC and its directors, Simon Rudland and Ebrahim Adamjee.
Sars said it has been investigating and clamping down on the illicit economy focusing on the tobacco, gold and fuel industry over the last year, and this was one of the many enforcement steps executed.
Sars Commissioner Edward Kieswetter said they were harnessing their capabilities to make non-compliance with legal tax obligations hard and costly to those who were engaged in this criminal pursuit.
He said the preservation order was obtained to prevent realisable assets from being dissipated, thus frustrating the collection of taxes.
Sasfin also welcomed the Sars action instituted against “alleged participants” within the illicit economy.
The group said it had closed the accounts of Gold Leaf and associated companies in 2017 following the discovery of suspicious transactions, which it said were reported timeously to the authorities.
“Sasfin has co-operated with the relevant authorities, including Sars, with regard to this matter... Sasfin has a zero tolerance for fraud and corruption, and takes the necessary steps to vigorously stamp it out,” the banking group said in a statement.
During an interview with radio financial journalist Bruce Whitfield, it was revealed that five Sasfin officials were corrupted into helping Gold Leaf boss Simon Rudland and “a massive transnational plunder network” to move more than R3 billion in illicit cigarette cash.
“I can say that we have, for separate reasons, changed the foreign exchange systems,” Sassoon said.
“All the information that we had gathered on our people did not result in actionable evidence to dismiss anyone. There is suspicion, and based on the information that (investigative journalist) Pauli (van Wyk) alludes to in the Sars case files, there appears to be far more reason to be suspicious and, on the back of that, we thought it was appropriate to suspend, pending the full outcome of our own investigation,“ Sassoon added.
Meanwhile, a lawyer acting on behalf of Gold Leaf, Raees Saint of Saint Attorneys, told Business Report on Friday that the tobacco group was displeased with the order.
Saint said the preservation order was obtained ex parte, without any notice to Gold Leaf, based on “unsubstantiated and wholly untrue allegations”.
“Gold Leaf maintains its innocence and shall continue its operations with complete transparency with the revenue authority, as it has always done,” Saint said.
“Gold Leaf will continue to make its excise and VAT contributions, amounting to more than R2 billion per annum.”
Saint declined to delve into the merits of the litigation, but said that they would defend Sars’ application in court.
“However, Gold Leaf wishes to emphasise that it was appalling to note that Sars has opted to rely on falsely crafted information in support of their application against Gold Leaf, a taxpayer who makes an enormous contribution to the fiscus and South African economy,” he said.
“Our client will oppose the application and protect its rights under the judicial system and we firmly believe that the truth, fairness and justice will prevail.”
BUSINESS REPORT