SARS welcomes the High Court decision on Mr Roux Shabangu
18 October 2024
The Commissioner for the South African Revenue Service (SARS) Mr. Edward Kieswetter has welcomed the decision of the Gauteng North High Court Division that held Mr. Ngwane Roux Shabangu accountable for his failure to pay SARS the outstanding taxes owed by him and his linked entities. Mr. Shabangu has various business interests in the construction and property industry.
After lengthy and protracted efforts by SARS to collect on the outstanding tax debt since 2019 and to prevent any realisable assets from being dissipated which would further frustrate the collection of the full amount of tax that is due and payable, SARS applied for Preservation Order in terms of Section 163 of the Tax Administration Act, Act no 28 of 2011. The preservation order was sought against Majestic Silver 275 (Pty) Ltd, which is the main property holding company used by Mr. Shabangu as well as Mr. Shabangu himself and his family members in their capacities as members of The Roux Shabangu Family Trust.
In what seemed to be a dilatory tactic to prevent the granting of the final Preservation Order, Majestic Silver 275 (Pty) Ltd applied to go into voluntary business rescue which would in effect, place a general moratorium on all legal proceedings against the company from the commencement of the business rescue proceedings.
SARS opposed this business rescue attempt and in February 2023, obtained a provisional Preservation Order which uplifted the moratorium provided for in terms of section 133 of the Companies Act 71 of 2008 in favour of SARS and appointed a Curator Bonis to effectively take control of the interests of Majestic Silver 275 (Pty) Ltd, Mr. Shabangu and his family members as Trustees of the Roux Shabangu Family Trust.
In April 2024 SARS obtained a final Preservation order against Majestic Silver 275 (Pty) Ltd and the other Respondents. The business rescue proceedings of Majestic Silver 275 (Pty) Ltd were set aside and terminated.
A decision was also made to institute liquidation applications against Mr. Shabangu’s companies and to institute sequestration applications against Mr. Shabangu and The Roux Shabangu Family Trust of which he is a Trustee of, in terms of Section 177 of the Tax Administration Act, Act no 28 of 2011.
In September 2024, the Liquidation and Sequestration applications were argued in the Gauteng North High Court. The Court, after due deliberation, granted a final Liquidation against one company and three provisional orders against the other company, Mr. Shabangu and his family members as Trustees of the Roux Shabangu Family Trust.
SARS Commissioner Mr. Edward Kieswetter said that “the results of the above applications serve as examples of SARS’ resolve to pierce through the corporate veil in its efforts to fulfil its legislative mandate to collect all money due to the country’s fiscus. Significantly, the sequestration order granted against the Trust is of particular importance as it highlights SARS ongoing efforts to enforce tax compliancy against discretionary Trusts which have been commonly utilised as a vehicle to evade taxes. SARS will not waiver from its path to pursue all without fear, favour or prejudice. I hope this application will deter all who intend to follow this route”
Issued by SARS, 18 October 2024
