Fin24

King no longer sequestrated over tax

2002-09-04 08:29

Cape Town - The court battle between business magnate David King and the South African Revenue Service (Sars), already lasting several months over tax payments of more than R900m, came a step nearer to its end in the Pretoria High Court on Tuesday.

This follows after Judge Willie Hartzenberg set aside the provisional sequestration of King's estate.

The judge had to reach a judgment on a series of intertwined applications raging between King and the Sars.

In his judgment, Hartzenberg said the setting aside was necessary in order to speed up the Sars' efforts "to get a bit of tax out of King".

According to him, the earlier sequestration order in May was correct, but the case had become more complicated in the mean time.

The setting aside would mean the disappearance of the large number of "unnecessary and academic" applications.

According to him, these applications could delay the real issue, whether King owes the Sars money, and how much, for a very long time.

The Sars' application to "lift the corporate veil" over King's relationship with international companies like Metlika Holdings and Ben Nevis Holdings would be heard later. Who will be responsible for the astronomical legal costs will be determined then.

In the mean time, King and his wife, Ladina, may still not dispose of their personal interests in several international and local business entities.

According to Hartzenberg, King alleges he is insolvent. No debt can be recovered from him unless the "corporate veil" is lifted.

"There is a very strong likelihood a court will find King used the companies Ben Nevis and Metlika as instruments to remain in the country and to dodge paying tax, and that the assets of these companies are in fact King's," Hartzenberg said.

According to the judge, it is clear that while King was living a life of luxury he claimed that he owned nothing in South Africa and that he had deliberately arranged his affairs in this way. According to information provided by him, his estate is worth only R550 000.

King's business success started in the late-Nineties when the shares of the company he founded, Specialised Outsourcing, were sold for more than R1.2bn. Ben Nevis owned 70% of these shares. King represented this company in South Africa.

According to Hartzenberg, King's luxurious lifestyle started at this time. Wine farms, houses worth millions of rands, luxury cars and a private jet are mentioned in the judgment.

Through companies in which he had an interest, King acquired half the shares in golfer Gary Player's horse-breeding farm for close to R13m.

The businesses in which the Player family has an interest were also dragged into the court case, but their underlying assets will not be affected by Hartzenberg's ruling.

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