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Send  Share  RSS  Twitter  17 Nov 2008

Finance: Dave King says SARS comments defy logic


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Prominent businessman Dave King has commented on the latest allegations made against him by SARS, pointing out that they defy logic and labelling them as “fiction”.

At a media conference on 4 November 2008, King gave an honest account of his ongoing dispute with SARS. "The Commissioner's response to the media conference was typical – he trumpeted my media statement as lies without factually denying any of its content. SARS' specific comments were limited to spin doctoring of the settlement agreement negotiated with Leonard Radebe," King comments.

In response to questions at the end of his media briefing, King discussed this agreement on 4 November. “I explained the matter fully on the day. For instance, I explained that Mr Radebe approached me to initiate settlement negotiations and that we both acted throughout the negotiations in a bona fide manner. Furthermore, I explained that subsequent developments highlight the conflict within SARS as to how my matter should be settled. This conflict is between the ‘enforcers’ (who lack in tax experience and wish to continue tax collection on a coercive basis) and those managers with tax experience (who believe that the forgotten ordinary rights of taxpayers should be reinstated by SARS). Mr Radebe stated that he was of the latter persuasion.

“In addition, I told the media that I had been introduced to Mr Jacques Nel for the first time at the initial meeting with Mr Radebe. Mr Noel Clegg was already known to me as a tax specialist who had performed VAT work for the wine farm and he handled the technical and compliance aspects of the negotiations on my behalf,” King explains.

After the media conference, SARS stated that King had lied about the above as the agreement was a fraud perpetrated against SARS by him and his "associates" (Messrs Clegg and Nel).

King has dismissed this response with disdain. “This contention would not even register on a common sense barometer. Anyone with the slightest knowledge would appreciate that, prior to implementation, any agreement with SARS would have to go before the civil and criminal courts and that the South African Reserve Bank (SARB) and the National Prosecuting Authority (NPA) would have to be notified. The idea of negotiating a fraudulent agreement and then presenting it to the prosecutor must beggar belief in any right-minded person. SARB and the NPA would automatically check its authenticity with SARS.

“Furthermore, the litigation in which SARS is the plaintiff could not be removed from the court roll without SARS' knowledge. Put simply – SARS' pronouncements are an insult to the collective intelligence of the media and the public at large,” he explains.

It is common knowledge that Radebe was suspended for concluding the agreement with King. “He was subsequently forced to resign in the face of being dismissed. Mr Radebe told me of his interaction with the Commissioner following his suspension. He reminded me of the two camps within SARS. Mr Radebe told me that he was to be dismissed due to the loss of trust in him by the Commissioner. The Commissioner reputedly warned him that, if he appealed to the Commission for Conciliation, Mediation and Arbitration (CCMA) or pursued his legitimate rights before the Labour Court, the Commissioner would exhaust him financially through the expenditure of legal fees.

“Mr Radebe advised me that his attorneys estimated that he would require R500 000 to progress the matter in the face of the Commissioner's threat and that he was compelled to attempt a settlement that secured some compensation for the balance of his employment contract,” King reveals.

Radebe has subsequently changed tack and now echoes SARS' position. However, King has provided the media with a selection of 15 communications from his records. “I believe that a simple reading of the documents discredits the fiction being put to the media by SARS and Mr Radebe,” King notes.

Document 1: This note to Noel Clegg confirms that King had made minor adjustments to the latest draft agreement. The reference to Gerrie Nel is because Radebe offered to take the signed agreement directly to the Gauteng head of the Scorpions. There was clearly no secrecy contemplated.

Document 2: This is a note to King’s attorney informing the attorney of negotiations, as King had not involved his legal team up to that point. This had happened in a number of previous settlement discussions with SARS. Mr Cohen was being advised, as he would have to implement the agreement and liaise with SARB and the NPA. It can be evidenced that King did not even know Mr Nel's surname at that time.

Document 3: This highlights that Radebe wished to make a change to the latest draft to incorporate a bank guarantee. Colleagues at SARS had warned him that King might not pay once the criminal charges had been withdrawn.

Documents 4 and 5: They both reflect further progress on reaching final agreement.

Document 6: King sent this email while he was in Chile as the parties had not yet reached final agreement and King did not want Radebe to think that he was “going cold” on the settlement.

Document 7: This is an update to King’s bookkeeper as she had advised King that Noel Clegg had been trying to get hold of him urgently. King’s bookkeeper interacted with Clegg while he was overseas to ensure that King’s requirements were met.

Document 8: This note to King’s attorney confirms the need to engage with SARB and the NPA. Again, there is no attempt at secrecy.

Document 9: This is a note to the attorneys for the NPA.

Documents 10 to 16: These cover correspondence following the intervention of SARS' legal team who, upon being advised that an agreement had been concluded, immediately tried to discredit it within the one camp. This caused difficulties for Radebe.

According to King, in subsequent correspondence with the Commissioner and his attorney, he demanded that the agreement was recognised, failing which he insisted that the alleged fraud be reported to the police. “It was only after my urging that SARS reported the matter to the police. I was not going to let SARS make bald allegations about a fraud without acting on them. The outcome of the investigation will be illuminating,” King notes.

King is now pursuing the implementation of the agreement and the court papers were served on SARS on Monday, 10 November 2008.

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