Chantelle Benjamin
12 March 2008
Johannesburg — WITH Dave King now estimated to owe the taxman more than R4bn with interest, the South African Revenue Service (SARS) has launched a full-scale bid to get its hands on all his overseas assets which it believes make up two-thirds of his wealth.
Following the sale of King's private jet, a Falcon 900B, for R100m last month after a six-year battle and two Supreme Court of Appeal judgments in its favour, SARS can turn its attention to King's overseas assets, thought to be close to R1bn.
SARS is awaiting a judgment in the next two weeks in the Royal Courts of Justice in London which will determine if King must disclose world-wide assets.
At the end of February, King appealed against a UK lower court decision to freeze all his assets in that country and to force him to disclose any assets he may have in other countries.
In the past six years, SARS has obtained restraint orders for more than R300m of King's South African assets, including houses in Sandhurst and Plettenberg Bay, and identified further assets, in cash, in the UK, Scotland and Guernsey. SARS alleges he owes taxes from the sale of 70% of the shares in risk management company Specialised Outsourcing.
When King was arrested in 2002 it was estimated he owed about R900m in outstanding taxes, and his offshore trust Ben Nevis owed about R1,3bn.
For the period under review, King had declared an annual income of R60000. According to SARS, the sum owed is, with interest, now closer to R4bn.
A ruling compelling King to reveal all his assets would make SARS's job of recovering outstanding taxes from King easier.
The case is being supported by the Reserve Bank, which is pursuing King for expatriating money from SA. King also faces 322 criminal charges, including tax evasion, fraud, money laundering, racketeering and breaching of exchange controls, brought by the National Prosecuting Authority.
King is scheduled to plead in his criminal trial in April but proceedings get under way only in June. Sources close to the case believe the matter will probably be delayed by King's lawyers.
SARS spokesman Adrian Lackay said yesterday the King case was a landmark one for SARS because of international concern about terrorism and international money laundering.
"We were able to sell the Falcon which was sitting in France and was not physically in our possession. The Asset Forfeiture Unit was also able to get some of the biggest restraint orders in the world through its counterparts overseas," he said.
King came to prominence in 1997 with the listing of his company Specialised Outsourcing, which started out in the mid-80s offering consultancy services.
He soon gained a reputation as a jet-setting entrepreneur with luxurious homes, private jets and celebrity friends. This attracted SARS's attention.
In its first year of listing, the share price of his company rose from R1,70 to R80.
News in 1999 that King had sold out his share, largely to institutional investors, at the height of the boom was attributed to a rapid drop in the share price.
King's trial comes as the European Commission announced that it would consider new proposals to widen the scope of tax evasion laws.
It is estimated that the European Union loses billions in euros every year because of tax evasion, with Germany alone claiming it is losing up to €3 0bn.
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