Bakgatla transaction allegedly under SARS probe | Fin24
 
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Bakgatla transaction allegedly under SARS probe

Apr 15 2018 06:00
Lesetja Malope

The Bakgatla Ba Kgafela Tribal Authority (BBKTA) allegedly faces a probe by the SA Revenue Service (SARS) related to tax evasion involving one of its multimillion-rand deals.

A reliable source close to the matter said the BBKTA transaction with Pallinghurst Resources a few years ago resulted in the transaction advisers agreeing to cancel their mandate and instead receive the money via a buyout for the same amount as the fee they were meant to get.

The matter was corroborated by one of the witnesses and former director of the BBK group Zitha Dube at the commission into the tribal authority’s affairs in Rustenburg last month.

Resource Finance Advisors (RFA) was mandated to handle the joint venture in which Pallinghurst parted with R1.6 billion to BBK, but instead of receiving a fee of more than R340 million, a deal was struck with BBK to buy them out for the same amount.

RFA’s only asset at the time was a cash balance of less than R8 million, in effect meaning that BBKTA bought an R8 million company for more than R340 million.

The decision managed got the attention of the taxman because of the tax implications of the fees.

SARS spokesperson Sandile Memela said the revenue service would not comment on the issue due to secrecy provisions contained in the Tax Administration Act.

BBK spokesperson Nonnie Letsholo opted not to respond to questions.

“We are inhibited to comment on issues that are before the commission prior to its conclusion and representations by parties. We cannot pre-empt witnesses’ testimonies when they take the stand upon the resumption of the commission in May by commenting on your questions at the moment.”

The RFA name was later changed to BBKFS, with Zitha as one of two directors and appointed BBK’s in-house asset management company for all the mining assets with BBK which at the time amounted in value to more than a billion rand.

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pallinghurst resources  |  sars  |  mining
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