Pretoria – South African billionaire Mark Krok’s local assets, worth R298m, were placed under curatorship by the North Guateng High Court in Pretoria on Friday.
The SA Revenue Service (Sars) obtained a final preservation order against the businessman.
Judge Hans Fabricius confirmed a provisional preservation order granted in February last year against Krok’s South African assets.
The assets include a large portfolio of shares in JSE-listed companies such as African Bank, BHP Billiton, Bidvest, First Rand, MTN, Vodacom, Sasol, SABMiller, and Tsogo Sun.
They also include a plot in Plettenberg Bay, a R40m property in Clifton and a Jeep Sahara.
In terms of the court order, no one except the curator may deal with the assets without the permission of Sars.
Sars obtained the order at the request of the Australian Tax Office (ATO), which said Krok owed them over R235m (AUS25.36m plus interest) for the period between June 2004 and June 2009. Krok relocated to Australia in 2002 but moved to the United Kingdom in 2008.
The ATO submitted that the absence of an affidavit by Krok, viewed together with the glaring absence of any undertaking not to dissipate assets, was significant.
Some of his assets remained blocked in South Africa under South African exchange control regulations, under the control of Investec Bank.
As part of his planning to move to the UK, he purportedly entered into an agreement with a British Virgin Islands (BVI) registered company, Jucool, of which the sole shareholder is Nova Trust Ltd in its capacity as trustee of the Jucool Trust. Jucool Trust is governed by Jersey Law.
The beneficiaries of the Jucool Trust are Krok, his children and the Jersey Blind Society, but Krok is not a director of Jucool or a trustee of the trust.
In terms of two agreements, Jucool purportedly bought the rights and interests in Krok’s assets for R290m, but no money ever exchanged hands and the purchase price was left outstanding as an interest-free “loan” Jucool owed to Krok.
Although Jucool claimed it was the “beneficial owner” of Krok’s local assets, the ATO based its assessments on the fact that contrary to Krok’s contentions, he retained legal and beneficial interests in the South African assets.
The ATO accused Krok of not declaring all his income derived from all sources, in or out of Australia, and said it regarded Krok’s arrangement with Jucool, as prohibited by South African exchange control regulations, as a sham.
Fabricius sided with the ATO, saying it appeared Krok repeatedly applied to the SA Reserve Bank (Sarb) for the release of millions of rands in blocked funds.
“The SA Reserve Bank did not grant exemption or approval to remit any income or capital to the BVI company under their purported assignment agreement,” the judge said.
“And the rights and interests of the South African assets were at all times regarded by the Sarb as belonging to Krok.”
It was also stated that in his dealings with the Sarb, Krok maintained those South African assets were legally and beneficially held by him solely. Numerous examples existed which indicated Krok dealt with the assets as if he was still the beneficial owner.
Fabricius ordered Krok and Jucool to pay the legal costs of the Sars application.
This article was originally published on: http://www.fin24.com