Sasfin’s existential can of worms and the risk to other banks

The SA Revenue Service’s (SARS) shock claims against Sasfin Bank stem from billions in payments made by several companies, some of which have previously featured in amaBhungane’s reporting on the local and regional money laundering industry.

In December SARS quietly lodged two damages claims in the Gauteng Division of the High Court in Pretoria: one for R1.97-billion, involving 18 named companies, and another for R2.9-billion, involving Gold Leaf Tobacco Corporation, which is controlled by Zimbabwean tobacco baron Simon Rudland.

The suit was first reported by Daily Maverick.

Aside from Gold Leaf, a number of the other 18 entities listed by SARS have ties with either Rudland or gold smuggler Andries Greyvenstein, their associate Howard “Howie” Baker, and the duo who facilitated many offshore payments for them – Mohamed Khan and his partner Sohail Jiwani, now deceased.

Some have previously featured prominently in amaBhungane’s reporting.

Read more in Daily Maverick: Gold Leaf Tobacco: SARS claims billions from Sasfin in Rudland money laundering debacle

Some of the other named entities have also been implicated in laundering funds derived from State Capture for the Gupta family and their associates.

The SARS claims stem from enormous tax debts SARS alleges are owed by the various entities, which cannot be recovered because, in SARS’ view, Sasfin helped put assets out of reach offshore on the back of seemingly fake documents, many allegedly supplied by Khan. 

Four Sasfin employees have been singled out by SARS as having aided the alleged scheme.

While the claim will certainly be defended, SARS’ demand of R5-billion potentially represents an existential threat to Sasfin, which, as of the end of last year, had total assets of R9-billion.

Sasfin said in a statement it had received legal advice that SARS’ claims were without merit.

“The legal opinion is unequivocal that the claim falls outside of the recognised parameters of applicable law and has a very remote likelihood of success,” said the bank.

The move against Sasfin is likely an attempt to test the legal waters and could be just the beginning.

AmaBhungane has already established how some of the entities mentioned in SARS’ particulars of claim did precisely the same thing at a number of other banks, paving the way for essentially identical cases against both small and major financial institutions.

Here is what we know about some of the entities that, if SARS has its way, Sasfin will have to answer for.

First off, there is Gold Leaf, which (using agents) deposited and then sent offshore a staggering R2.9-billion “which was not declared to SARS”.

This scheme has been exposed before and SARS’ particulars of claim emphasise that the bank itself had already flagged Gold Leaf as “high risk” in 2016, and, in September 2017, flagged 10 specific dodgy transactions. 

AmaBhungane previously reported on these transactions, which involved fake invoices – ostensibly for cigarette-related goods –  justifying payments to Aulion Global Trading – a Dubai company owned by Howie Baker – as well as other fronts, including one belonging to Andries Greyvensteyn. (See here.)

Even after a brief internal investigation confirmed that these transactions were “fictitious, fraudulent, alternatively based on incorrect documentation and information”, it still took two months for Sasfin to close down Gold Leaf’s account, says SARS.

SARS wants Sasfin to cough up the entirety of this R2.9-billion to help settle a R4.46-billion tax debt that Gold Leaf was assessed for. SARS claims Sasfin is liable for negligently allowing the R2.9-billion to be illegally exported.   

While Gold Leaf’s operation at Sasfin is already well known, many of the 18 other companies on SARS’ hit list are more obscure. Although together these companies exported R5.3-billion through Sasfin, SARS is only coming after the bank for their tax debts, which amount to R1.97-billion.

Actinic Holdings was a short-lived vehicle which, according to SARS, paid a total of R51,287,983 into its Sasfin account in 2019. This company was the subject of an amaBhungane exposé, which showed how it was set up as a front for money laundering that took place not only via Sasfin but also via other banks, including Bidvest, the defunct Habib Overseas Bank and Mercantile.

Data at amaBhungane’s disposal shows that Actinic moved another R114-million through accounts at Bidvest, Habib and Mercantile, making clear the potential threat to other banks should SARS succeed with Sasfin.

Another company cited by SARS has likewise been probed by amaBhungane and similarly poses a threat to more than one bank.

Putzmeister SA, according to SARS’ particulars of claim, received deposits totalling R67.9-million at Sasfin. We previously reported how this company was used to expatriate money through an innovative scheme involving a manufactured court order for a debt repayment.

The company is a local subsidiary of a German group dealing in heavy construction vehicles, but its local chief executive went rogue, allegedly colluding to fabricate a R67-million “debt” enforced by a sham court order which was presented to banks’ forex departments to justify offshore payments.

This court order was apparently recycled at other banks to justify duplicate payments.

And then… the Guptas

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