11 December 2008

South Africa: Country's First Racketeering Case to Go On After Five Acquitted

Johannesburg — WELL-known aviation industry businessman and multi-millionaire Hennie Delport lost a bid in the Pretoria Regional Court yesterday to have SA's first racketeering case thrown out of court on the grounds that the state failed to make its case.

Magistrate Adriaan Bekker did, however, acquit five of the 13 accused, most of them Delport's employees, because of lack of evidence against them. Among those acquitted were former South African Revenue Service (SARS) employee Hendrik van der Merwe and Delport's brother Andre.

The remaining accused, including Delport, are vendors alleged by SARS to have claimed R250m in fraudulent value-added tax (VAT) and excise duties on cigarettes that were never exported. They have all pleaded not guilty.

One of the accused, former bank employee Lizanne Rogers , pleaded guilty to money laundering and reached a plea bargain with the state.

Delport, who owns cargo transporter Phoebus Apollo Aviation and cigarette factory Exclusive Tobacco Products, instituted SA's first raid on SARS offices in 2002 in a civil case he brought against the taxman.

He alleged SARS and British American Tobacco were conspiring to jeopardise his business operations.

The taxman in return has levelled 7000 charges against Delport and his co-accused and called 40 state witnesses, including customs officials from Zambia, Malawi and Zimbabwe.

More than 40000 exhibits have been handed in since 2004, when the case first went to court, and the Asset Forfeiture Unit has seized assets worth R70m.

Court-appointed curators from KPMG are based at Delport's businesses to ensure that assets, including 10 light aircraft, vehicles and property, are not sold.

He was allowed to continue operating his businesses after a court battle.

SARS has accused Delport of forging documents to say he had exported cigarettes, as a way to get VAT returns. The cigarettes were then allegedly sold in SA.

The accused argue that the cigarettes were flown out of the country with the relevant airway bills, clearing papers and manifests.

Yesterday Bekker said he had examined the 7000 charges against each of the accused and ruled that the state had failed to prove its case in respect of the five people he acquitted.

In some cases there might be suspicions that crimes might have been committed, but that was not enough to continue the cases against them, Bekker said.

Yesterday lawyers for the remaining accused asked for a postponement to January to decide how to proceed.

Should the accused decide to testify, they can be cross-examined by the state.

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