Wiese Named in $279 Million South African Tax Case, FM Says

JOHANNESBURG (Capital Markets in Africa) – South Africa’s tax agency is investigating local billionaire Christo Wiese and former executives at law firm ENSafrica for their role in obstructing the collection of 3.7 billion rand ($279 million) in taxes, according to a report in the Financial Mail.

ENSafrica created a tax structure to help pan-African crude-oil explorer Tullow Oil Plc shift assets valued at 3.9 billion rand out of the country, dodging taxes in the process, the Johannesburg-based magazine said, citing papers filed by the South African Revenue Service in the Western Cape High Court. The story was written by journalists at the amaBhungane Centre for Investigative Journalism.

SARS claimed ENSafrica restructured Tullow, leaving it in charge of a South African company that was a tax shell, and then sold this on to Wiese and his Titan group, the magazine reported. Wiese then allegedly moved assets out of the company and sold it to a former ENSafrica executive who told the tax agency there weren’t any assets or cash to claim, it said.

SARS wants Wiese and three others — including a former ENSafrica executive — to pay 217 million rand personally as part of its broader claim, the Financial Mail said.

Legal Advice
“Titan had nothing to do with the restructuring and gained no tax benefit,” Wiese said by phone Thursday. “I will be taking legal advice on whatever is misleading. The restructure has nothing to do with me; this is a SARS and ENS matter.”

SARS can’t comment on the affairs of taxpayers, it said in an email. Tullow declined to comment.

An entity related to ENSafrica bought one of the group companies involved in the Tullow restructure in 2007 and this was subsequently sold to Titan in the same year, ENSafrica said in an emailed statement.

ENSafrica and its affiliates have, “at all times, complied with all the requirements of the relevant tax laws,” the firm said. SARS “has all the relevant facts in relation to the role of each of the advisers, including the role of our firm and our affiliates. SARS has not sought to impugn the role of any of the advisers, including ourselves, arising from these transactions.”