SARS clips Dave King's wings

Johannesburg - SARS last week celebrated what it regards as a significant victory in its ongoing efforts to extract what it regards as long-overdue revenue from alleged tax dodger Dave King. Nearly five years after a private jet registered to companies linked to King was sited offshore - the country's tax authorities have succeeded in selling it.

SARS wants about R3bn from the controversial businessman who started Specialised Outsourcing. The postman's son turned corporate high-flyer made a killing in Outsourcing shares and departed hurriedly amidst a scandal around stock sales as the price plummeted in 1999.

King has always maintained he acted within the law and has been unrepentant despite vociferous criticism from the investment community.

He has also refused to pay what SARS believes is due to the state based on tax advice he received at the time.

Last week SARS sold a private aircraft belonging to Carmel Trading and Hawker Air Services. The Falcon 900B, registration ZS-DAV, has been parked at Le Bourget executive airport north-east of Paris since April 2003.

Since then it has been the subject of a costly tug-of-war between SARS and King's companies. The sale of the aircraft was okay'd by Judge J Preller in May last year who said the transaction was legal even though the asset was outside the country's borders.

Appeal

Carmel Trading appealed the decision and in November the Supreme Court ruled the aircraft could be sold.

It was advertised in the government gazette and the Sunday Times in December and was put out to tender early this month. 11 tenders were received ranging from $5-m to $13.585m.

The latter from an entity called Intergalactic Overseas Limited based in the British Virgin Islands, which plans to on-sell the aircraft to a buyer in the US. It is unclear who is behind those transactions.

The aircraft, which according to court papers was valued in 2002 at more than R200 000, therefore achieved a little over half that amount. The Supreme Court judgment in November last year which finally authorised the sale pointed to the aircraft not being appropriately stored in a hangar and that it was rapidly losing value and would "soon be basically worthless."

The judgment said the refusal by Carmel Trading to allow the aircraft to return to SA was "merely out of spite and obstreperousness."

The cash realised from the sale of the aircraft will be kept in trust pending the outcome of the King tax matter. Both SARS and King are on record as saying they want the tax dispute resolved - but as each side is not prepared to give an inch in the battle - each contentious issue is fought in the courts.

The matter is unlikely to be resolved in the next two to three years.

- Fin 24