A tax court judgment has slammed the conduct of businessman and alleged tax dodger Dave King, describing the newly appointed executive chairman of listed investment holding company MicroMega Holdings as “a glib and shameless liar”.
King has been involved in an almost decade-long legal battle with the SA Revenue Service (Sars) over his personal tax affairs and those of companies he represented or controlled. Attempts to obtain comment from King were unsuccessful.
The judgment by Judge Brian Southwood and two assessors handed down in the North Gauteng High Court in October last year was previously confidential.
It became public when it formed part of an application by Sars in the North Gauteng High Court on Friday to execute and collect as much as possible of the assets, which had been converted to cash following preservation orders obtained by Sars, for the R2.7 billion tax debt of Ben Nevis and Metlika Trading.
King represented Ben Nevis in South Africa and controlled Metlika Trading.
Judge Aubrey Ledwaba reserved judgment in this application on Friday.
The tax court judgment dismissed the tax appeal of Ben Nevis against the income tax assessments issued by Sars in February 2002. Ben Nevis lodged an appeal against this judgment, but withdrew its appeal last week, which finally established the tax debt of Ben Nevis was R2.7bn.
Southwood said the court had seen King testify for four days and “are unanimous in finding that he is a mendacious witness whose evidence should not be accepted on any issue unless it is support by documents and other objective evidence”.
“It was remarkable that King showed no sign of embarrassment or any emotion when he conceded that he had lied to the (Sars) commissioner in a number of his income tax returns. In our assessment, he is a glib and shameless liar.”
King, an investment adviser, developed investment software and helped create Specialised Outsourcing, a firm which was listed on the JSE and is 70 percent owned by British Virgin Islands-registered Ben Nevis.
Between 1998 and 2001 Specialised Outsourcing sold shares, mainly through King, for a profit in excess of R1.2bn.
In 2001, Sars levied a tax assessment against King for R912.8 million, which has not yet been finalised. The High Court in Pretoria heard in 2002 that King’s income tax returns for the years 1990 to 2001 reflected a modest annual income of R60 000 and King had then asked to be deregistered as a taxpayer.
Sars launched an investigation into King’s affairs in May 2000 when it became aware that he had bought an Irma Stern painting for R1.76m and could not reconcile this purchase with his declared gross income of R60 000.
King resigned from MicroMega eight years ago because of his legal battle with Sars and his wish to distance MicroMega from his difficulties with Sars, but returned as executive chairman last month. MicroMega’s share price more than doubled during the week in which his appointment was announced.
He said the decision to accept the position of executive chairman, despite the lack of finalisation of his legal battle, was motivated by a settlement agreement he claimed was reached between himself and Sars and the Reserve Bank in late 2009. - Roy Cokayne