R800m fraud exposed

Durban - A “shameless” R800 million tax fraud committed by a trader in animal feed has been exposed in a case before the high court in which a Durban businessman is accused by Sars of being a “co-wrongdoer”, who should be made to repay the R41 million he allegedly got out of the deal.

But the businessman – Jacques Sassin, owner of Trojan Seeds Pty Ltd and former co-owner and employee of Benietha Veevoere Pty Ltd – has denied playing any role in what Durban High Court Judge Rishi Seegobin labelled “an extraordinary grand-scale fraud”.

In a recent judgment, Judge Seegobin said Sassin’s denials could not be rejected as being “far-fetched”.

He also slammed Sars for attempting to get a money judgment against Sassin through hearsay evidence from a confidential inquiry which he said could not be used as it would give Sars an “unfair advantage”.

He referred the matter to trial where he said Sassin would get an opportunity to cross-examine his accusers and give evidence to clear his name.

“Whilst I have no difficulty in principle regarding the important public function Sars is required to perform in collecting taxes, I do have a difficulty when it sets out to achieve its aims in an unfair, unconstitutional and prejudicial manner,” the judge said.

The main player in the fraud, the judge said, was one Petrus Johannes Uys Badenhorst who traded as SA Global Trading. He owed Sars more than R800 million but was “insolvent” and there was no hope of recovering anything from him.

So the revenue service turned its sights on Sassin, alleging he was a party to Badenhorst’s VAT fraud scheme which he perpetrated through the use of a valid certificate entitling him to buy feed at a zero VAT rate for his own use, but not for trading.

Sassin worked as a trader for Benietha, buying and selling animal feed products, and occasionally did business with Badenhorst’s “small one-man enterprise”.

“The volume of trade was low … but things changed in 2012 and, after a meeting in a restaurant, the volume of trade escalated with both dealers buying and selling the same quantities of feed from each other during the same periods,” the Judge said. “Sars said this was strange. Firstly because Benietha sold the feed to SA Global and then bought it back at a lower price, causing SA Global to make a loss.”

The transactions, which involved the use of the zero VAT rate certificate by SA Global when it bought the feed, led to Benietha being able to claim back huge refunds from Sars calculated on “artificial volumes”. Sars alleged Sassin paid these tax refunds to Badenhorst and in return got “sizeable rewards” paid into the account of Trojan Feeds to avoid detection by the co-owners of Benietha.

When Sars caught up with Badenhorst, he claimed he had paid Sassin about R65 million. Sassin agreed to pay back Badenhorst so he could pay Sars, but after Sassin repaid R24 million, Sars froze Badenhorst’s bank accounts, preventing further repayment. This left R41 million still owing which, Sars alleged, was “secret profits” and claimable.

Sassin, through his legal team, said the application was an abuse of the court process because Sars was attempting to rely on Jacques Sassin untested evidence obtained in the (section 50) inquiry probing the fraud.

He said the legal route taken by Sars in this matter – to ventilate via court papers rather than oral evidence – was not suitable in deciding a disputed issue of whether fraud was committed.

The Mercury

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