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

[Nat Quinn]

SARS’ shock claims against Sasfin Bank stem from billions in payments made by a number of companies, many of which have previously featured in amaBhungane reporting on the local and regional money laundering industry.

In December SARS quietly lodged two damages claims in the Pretoria high court: one for R1.97-billion and involving 18 named companies, and another for R2.9-billion and involving Gold Leaf Tobacco Corporation, which is controlled by Zimbabwean tobacco mogul 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 reporting.

Other of the 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 only R9-billion.

Sasfin said in a statement that 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 may be only the beginning.

AmaBhungane has already established how some of the entities mentioned in SARS’’particulars of claim did exactly 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 later, in September 2017, flagged ten 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 also https://amabhungane.org/the-laundry-how-shape-shifting-money-launderers-infiltrated-sa-banks-part-one/stories/)

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 expose, which showed how it was set up as a front for money launderingthat 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 likewise 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

Then there are three entities that are all linked to the externalisation of funds derived from state capture and the Gupta family’s operations.

These are Zokubyte, Coral General Traders and Varlozone.

Zokubyte and Varlozone were both flagged for relatively small amounts sent out of South Africa in research submitted to the Zondo Commission by researcher Paul Holden. Coral was separately flagged in Al Jazeera’s Gold Mafia documentary as a conduit for Gupta money.

The Holden report given to Zondo found that Zokubyte had, among other things, received over R9-million from a company called Saamed Bullion, which was a conduit for state capture funds.

Zokubyte would in turn fund Varlozone and both would send money abroad via Sasfin.

SARS says the three companies respectively moved R15 754 114, R29 585 441 and R26 741 514 through Sasfin – far more than Holden managed to pin on them.

It is unclear who controls Zokubyte, although Al Jazeera claimed that Khan was in charge of Coral’s transactions – something amaBhungane has not independently established.

The accountant’s mailbox

Two more companies listed by SARS, Lone Eagle General Traders and Ocean Twelve General Trading, were responsible for R90-million and roughly R2-billion in exported cash respectively – the latter being the single biggest amount coming from any one of the companies outside of Gold Leaf itself.

The PO Box used by both belongs to an accounting firm, since deregistered, called Amigge & Associates, which listed auditor Ahmed Mohamed Igge as its director.

All attempts to reach Igge on his known numbers were unsuccessful and it is understood he may have left the country for a time.

Igge was coincidentally also the listed auditor of a company called PKSA Finance – the main vehicle used by Khan and the late Jiwani to channel money through banks other than Sasfin to an offshore company owned by Baker.

AmaBhungane previously reported on how PKSA moved almost R600-million through the now provisionally liquidated Habib Overseas Bank, mostly to Aulion Global Trading in Dubai.

Khan declined to comment when contacted by amaBhungane.

A number of the companies listed by SARS have no obvious link to the tobacco-and-gold network, suggesting a broader laundry system used by a variety of players.

We will, however, keep digging.

 

 

source:Sasfin’s existential can of worms and the risk to other banks – amaBhungane

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