Sasfin receives damages summons from SARS, which it firmly rejects

27 February 2024 Sasfin Holdings

Leading local legal experts advise that the summons has a very remote likelihood of success

Sasfin Holdings announced today Sasfin Bank has received a civil summons, unprecedented in South African law, for a total amount of R4,87 billion plus interest and costs, in the form of a damages claim instituted by the South African Revenue Services (“SARS”). This summons relates to SARS’ purported inability to collect income tax, value-added tax, and penalties allegedly owed by former foreign exchange clients of the Bank.

Subsequent to receiving this summons, Sasfin engaged with the relevant regulators in a transparent manner and obtained a legal opinion from ENS, authored by Professor Dale Hutchinson, Professor Michael Katz, and Aslam Moosajee, and endorsed by Advocate. Wim Trengove S.C. The legal opinion is unequivocal that the claim falls outside of the recognised parameters of applicable law and has a very remote likelihood of success.

Commenting on the matter, Sasfin CEO, Michael Sassoon, said: “We are confident that the SARS claim has no merit. We have filed a notice of intention to defend the matter, which we will do rigorously. It is unjust for banks to be held liable to SARS for taxes that their clients have failed to pay.

SARS’ claim relates to the expatriation of money going back to 2014, in which a criminal syndicate colluded with former employees of Sasfin Bank who were operating outside of their scope and authority of employment. As soon as Sasfin became aware of the collusion, it took decisive action and instituted an independent investigation which resulted in the termination of relationships with implicated clients and employees and the opening of criminal cases against them.

Sassoon concludes: “Of importance is that this is not a tax claim, but a claim for damages and has nothing to do with Sasfin’s own tax affairs. The claim, which we emphatically reject, will involve a protracted trial action, and the matter is only likely to conclude in several years’ time.

Sasfin has concluded that the claim will not result in the recognition of any liability and that it has no effect on its capital position.

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