Durban - Billionaire tenderpreneurs Shauwn and S’bu Mpisane have been declared “factually insolvent” by the South African Revenue Service (Sars) in a court application for their estate to be sequestrated.
The application was launched in the Durban High Court last month, days after Sars was granted an order to “preserve” the assets of the Mpisanes who, the receiver said, had not paid all their tax - more than R200 million.
During the festive season the Durban couple usually splurge, spending millions on parties and presents, but this year the taxman has dampened the Christmas mood in their home.
In affidavits before court, Lorraine van Esch, manager of the investigative audit enforcement unit at Sars, said Shauwn owed more than R57m in income tax.
“Ms Mpisane is indebted to Sars in respect of outstanding income tax together with administrative penalties and outstanding taxes of R57 425 534,” she said.
Investigations into their tax affairs began in 2014 when Shauwn was assessed for the 2008 to 2012 financial years.
She was later assessed for 2013, 2014, and last year and her debts added to the existing amounts.
However, the affidavits state that the total indebtness of Mpisane, and two linked companies, Zikhulise Cleaning and Maintenance Transport CC and Zikhulise Auto Recoveries CC, exceeded R200m.
The debt was acknowledged by the Mpisanes, who agreed they would pay it off in monthly “deferred payment” instalments of R500 000. However, later they said they couldn’t pay because of cash flow problems caused by slow payments from government departments for their tenders.
Van Esch said Sars’s attempts to collect the debt had been frustrated and now the taxman had started the process to prevent them “dissipating their assets”.
The Mpisanes’ assets include a fleet of luxury vehicles, some of which have already been seized by officials. They own 128 cars and 10 properties. Their estate is made up of the Zikhulise Group Pty Ltd “holding company” which includes a group of entities.
The application also highlighted that the Mpisanes’ employees were not registered for Pay As You Earn (Paye) and they, too, would be served with a sequestration order if found at the Mpisane residence.
In a move to recover the debt due, Sars has liaised directly with the government departments that had been awarding construction contracts to the couple.
This included the KwaDukuza Municipality and the eThekwini Municipality.
The eThewini Municipality declared it had awarded R1.1 billion in tenders to the Mpisanes between 2014 and this year.
Sars also established that the the eThekwini Municipality had made payments of more than R52m to the Zikhulise Group between April and June this year, so they should have been able to pay their tax debts.
“It is inconceivable (that they have a cash flow problem when) the Zikhulise Group has been awarded tenders and is already receiving such large amounts from the municipality in such a short period,” Van Esch said in the papers.
She also said it was odd that there was suddenly very little activity in the couple’s accounts.
“The flow of funds to the Mpisane bank accounts and in associated entities has been affected, having slowed or nearly stopped.
“It is respectfully contended that the Mpisanes and their entities are creating new entities and using creative accounting transactions, to the prejudice of Sars and other creditors,” the application said.
The couple did not respond to repeated queries for comment.
But earlier this week, S’bu told The Mercury that Sars was “victimising” them for blowing the whistle on corruption in the revenue service.
“This is beyond tax. It all started when we reported corrupt Sars officials over a R4m bribe. We submitted all the video footage, but it went missing.
“By doing so, we opened the door to be charged.”
The family was preparing for a fight they would win, he said.
Sars spokesman Sandile Memela said the service did not comment on the affairs of taxpayers due to the confidentiality principles of the Tax Administration Act.
Responding to the Mpisanes’ corruption allegations, he said: “Sars takes allegations of corruption seriously and the matter is being dealt with”.
The sequestration case is set to be heard in March.