OPINION| The hostile takeover of Africa Cash and Carry

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If we were a society that finds comfort in critical thinking, we would ask ourselves numerous questions and go deeper beyond what meets the eye. When one views the well-orchestrated commissions of inquiries that the people of this country have been subjected to over the past few years, one realizes that these expensive, fruitless commissions have been abused as tools to appease certain protected businesses at the expense of vulnerable companies.

The same applies to other state institutions that have been turned into a machine gun targeting specific people.

The South African Revenue Services (SARS) is a classic example of how a few individuals have captured and weaponized these institutions against certain people and their businesses. It is distressing that 26 years into our young democracy, corruption at the corporate level flourishes uninterrupted.

The demise of Africa Cash and Carry (ACC), an entity owned by the Hathurani family, gives us a glimpse into the staggering white-collar crimes that have brought the young promising black-owned retailer into its knees. A few years ago, ACC expanded its footprint in Africa to pursue major projects in the continent’s competitive markets.

In an article published by Business Report on Independent Online (IOL), ACC Steered by the then Chief Executive Officer (CEO), Cassim Aysen, allegedly siphoned company funds into his own family accounts and evaded tax. While Aysen was in charge of the affairs of ACC, he allegedly got into an “entanglement” with senior SARS officials to buy time and establish a rival company named Continental Cash Carry which dwarfed the efforts of Africa Cash and Carry.

In a bizarre incident, some of the key players who are SARS officials had launched an investigation into tax affairs of ACC and ordered an audit. The audit concluded and slapped ACC with a tax bill of over a billion rands.  SARS recommended its closure.

 Interestingly, reports are that Ashraf Parak, a lawyer decided to jump ship and abandon SARS to provide legal services to other Cash and Carriers that have never been audited but swiftly get their tax audits done. Ashraf, the ex-senior SARS official, is also providing legal services to the Mr Cassim Aysen, who as the then Chief Financial Officer and CEO of ACC, failed to facilitate tax payment to SARS.

SARS, an institution entrusted with a responsibility to collect tax revenue, has been left to blame for its corrupt officials who seem to have engineered the fall of many companies, notably Africa Cash Carry.

When looking at the ACC matter, glaring inconsistencies exhibited by SARS in its quest to recover tax monies leave so much to be desired. Strangely, some individuals are left off the hook while others get whipped when they fail to meet their obligation. Hundreds of jobs are left hanging in the balance as ACC fails to get tax leniency and waiving of penalties from SARS.

Black Coffee, a recognisable international DJ, owed SARS more than R40 million in tax but managed to negotiate his obligation down to just R8 million. SARS is allowing him to be able to breathe and save his career, which could have been destroyed if leniency was not afforded to him. One would expect the same taxman to extend an olive branch with reasonable timeframes for ACC to meet its obligation. But internal SARS officials with sophisticated relationships with Aysen seem to have other ideas.

In a bid to save the company and protect the employees’ jobs, ACC applied for Section 200 of Tax Administration Act, but Chief Auditor Dirk du Ploy of SARS turned a blind eye and refused to grant the request, sealing the closure of this once major player in the obligation.

It is unfortunate that the employees who have given their lives to the company and saw the growth of ACC – will now watch helplessly as the company sinks.

What has occurred to Africa Cash and Carry can be best described as a hostile takeover.  A former ACC CEO intentionally evaded tax, siphoned company funds without the knowledge of shareholders and directed the money into his own family accounts to start his own company. Sadly, state resources were mobilized against the same people it’s supposed to protect – to destroy ACC.

SARS must restore public trust and credibility of the institution, and launch an investigation into the alleged hostile takeover of Africa Cash and Carry through collusion with Senior SARS officials. They have abused their powers and brought the institution into disrepute.

By Thabo Makwakwa

Social Commentator and Political Analyst