Statement by Dave King, executive chairman of MICROmega Holdings Limited (Registration number 1998/003821/06), January 18 2011
STATEMENT BY THE EXECUTIVE CHAIRMAN OF MICROMEGA HOLDINGS LIMITED
In response to enquiries made by a number of MICROmega shareholders following upon yesterday's announcement of the appointment of Dave King as Executive Chairman of MICROmega, the board of MICROmega believe it is appropriate that Mr King furnish to MICROmega shareholders an explanation for his acceptance of the position as Executive Chairman of MICROmega. Mr King`s statement follows.
"There has been significant media interest in gaining clarity on my decision to accept the appointment of Executive Chairman of MICROmega Holdings Limited ("MMG"). This interest is predominantly aimed at gaining greater insight into how my as yet unresolved legal matters might affect MMG and its shareholders going forward.
There were two main reasons for my resignation from the board of MMG 8 years ago. I needed time to devote to my legal matters and I wished to distance MMG from my difficulties.
With the passage of time I was able to engage with SARS to the point that we signed a settlement agreement in 2009 in which the Commissioner agreed to a full rebate of penalties. The Income Tax Act precludes settling on a zero penalty basis if the Commissioner believed that he had not received full and frank disclosure or if he believed that my actions constituted fraud. It is therefore clear that SARS` viewpoint has changed substantially since 2002.
The position with the exchange control authorities is similar. I reached agreement with SARB after which they sent a letter to the NPA withdrawing further interest in pursuing criminal allegations.
The agreements with SARS and SARB were necessary partly because both state agencies had precluded me from applying for amnesty at the time that this was available.
The agreements with SARS and SARB were ultimately unable to be implemented through no fault of myself, SARS or SARB. This resulted in the litigation continuing to an advanced stage whereby the tax disputes are likely to be finalised by the tax courts in the reasonably foreseeable future and this greatly reduces the need for either the state or myself to settle solely as a matter of convenience.
The position with the NPA is more uncertain. Having been brought into my matter by SARS and SARB the NPA is rightly concerned that the public profile that it has maintained in my matter is now compromised by the settlement agreements. This appears to have resulted in the NPA attempting to improve its position by repeating a similar approach to a few years ago when progress in my matter stalled. At that time the NPA added charges in relation to the awarding of a contract by Umgeni Water. After generating much publicity around this matter the NPA withdrew all charges when the matter eventually went before the court.
The NPA has now repeated this process by introducing new allegations. None of this was new to me however what was new was that I was provided with witness statements that were made by individuals many years ago and that without exception accord with my version of events. I consequently view the new allegations in the same light as the Umgeni debacle.
I consequently found myself in the latter half of 2010 in a more composed frame of mind regarding the litigation and the outcome thereof. I had enough time to devote to normal business affairs and involved myself in new opportunities that I introduced to MMG. After further consideration and discussion I eventually agreed to rejoin MMG and to devote my time to the growth of the Group. I am comfortable that this is the right decision for myself and for the shareholders of MMG."
18 January 2011
Statement issued through the JSE's SENS Service, January 18 2011
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