South African Revenue Service (Sars) Commissioner, Edward Kieswetter, has initiated legal proceedings against Sasfin Bank for two damages claims of R1.97 billion and R2.9 billion. The bank was served a civil summons for a total amount of R4,872,327,649. plus interest and costs in the form of a damages claim, instituted by Sars, which arises from Sars' purported inability to collect income tax, Value Added Tax, and penalties allegedly owed by former foreign exchange clients of the Bank. The bank said that former foreign exchange clients operated as a syndicate that ran an unlawful scheme to facilitate the expatriation of money out of South Africa and colluded with former employees of the bank who operated outside the scope of their employment.
Sars took decisive action when it became aware of this unlawful scheme, including instituting an expanded investigation led by an independent forensic consultancy. This resulted in the termination of relationships with the implicated clients and employees and the opening of criminal cases against them. Sasfin CEO Michael Sassoon told Moneyweb that the Sars claims have no merit and that it is unjust for banks to be held liable to Sars for taxes that their clients have failed to pay.
