Christo Wiese Named in South African Tax Agency’s $16 Million Claim

(Bloomberg) -- South Africa’s tax agency filed a legal claim against local billionaire Christo Wiese and former executives at law firm ENSafrica for more than 217 million rand ($16 million) in unpaid taxes, court documents show.

The papers filed in the Western Cape High Court is part of a wider 3.7 billion rand claim by the South African Revenue Service, according to a report in the Financial Mail published earlier Thursday. ENSafrica created a tax structure to help pan-African crude-oil explorer Tullow Oil Plc shift assets valued at 3.9 billion rand out of the country, dodging taxes in the process, the Johannesburg-based magazine said. The story was written by journalists at the amaBhungane Centre for Investigative Journalism.

SARS claimed ENSafrica restructured Tullow, leaving it in charge of a South African company that was a tax shell, and then sold this on to Wiese and his Titan group, the magazine reported. Wiese then allegedly moved assets out of the company and sold it to a former ENSafrica executive who told the tax agency there weren’t any assets or cash to claim, it said.

Wiese and the three ENSafrica representatives should pay the 217 million rand personally, according to the court documents.

Legal Advice

“Titan had nothing to do with the restructuring and gained no tax benefit,” Wiese said by phone Thursday. “I will be taking legal advice on whatever is misleading. The restructure has nothing to do with me; this is a SARS and ENS matter.”

SARS can’t comment on the affairs of taxpayers, it said in an email. Tullow declined to comment.

An entity related to ENSafrica bought one of the group companies involved in the Tullow restructure in 2007 and this was subsequently sold to Titan in the same year, ENSafrica said in an emailed statement.

ENSafrica and its affiliates have, “at all times, complied with all the requirements of the relevant tax laws,” the firm said. SARS “has all the relevant facts in relation to the role of each of the advisers, including the role of our firm and our affiliates. SARS has not sought to impugn the role of any of the advisers, including ourselves, arising from these transactions.”

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