The Durban-based tender tycoons get a helping hand from the taxman.
Over the past eight years, Durban’s infamous bling couple Shauwn and S’bu Mpisane, have tried every conceivable trick to outwit the taxman – from bribing officials and hiding assets, to frivolous court actions – all to stall for time. And it would appear that SARS has been only too keen to help them along.
As previously reported in Noseweek, (noses 103; 125; 150; 195; 204; 205; 208; 209; 211 & 213) SARS has already tried to help the Mpisanes out of trouble by scrapping a criminal investigation and waiving massive tax debt through the swish of a pen in unofficial meetings.
|S'bu and Shauwn Mpisane|
First, in March 2009 Jonas Makwakwa, notorious former Chief Officer at SARS, illegally knocked R13 million off their then R33m tax bill. That was later reversed. Then in 2011/12 Shauwn Mpisane, along with her company Zikhulise Cleaning Maintenance and Transport CC, faced 119 criminal charges including forgery, tax fraud and the underdeclaration of VAT where SARS was the complainant. But the taxman made a U-turn in 2013, using what would later be proven as false allegations levelled by the Mpisanes against the lead State prosecutor in the case, Meera Naidu, as a reason to no longer support the prosecution.
The man who took that decision was none other than former SARS head of tax and customs investigations, Gene Ravele (nose233) who told then head of the NPA Nomgcobo Jiba, KwaZulu- Natal’s Director of Prosecutions Moipone Noko and the national director of the Specialised Commercial Crime Unit, Lawrence Mrwebi, that “the trial has been rendered unfair”; that “justice will best be served to stop the prosecution” and that “there is no hope of a successful prosecution”.
The NPA was only too happy to scrap the case, acquitting Shauwn on all charges because of “prosecutorial misconduct”. Prosecutor Meera Naidu was cleared two years later after an internal disciplinary hearing.
In SARS’s latest attempt to derail their own probe, it has withheld payment of the fees of the curators they appointed in November 2016 to preserve the assets SARS seized from the Mpisanes in their latest tax spat with the family.
Due to the non-payment of fees owed to them – which at one stage stood at nearly R1m – the curators said they had been unable to secure all the movable assets or account for them, thereby gifting the tax-dodging couple ample time to dissipate their assets through what appear to be sham sales and questionable debt-repayment agreements.
The Mpisanes – who incidentally are divorcing – owe about R141m in taxes both personally and through their various companies. The main business is Zikhulise Cleaning Maintenance and Transport. Despite its name, the company has secured more than onebillion- rand’s worth of contracts over a decade to build low-income housing from various KZN municipalities (mostly eThekwini Metro) and from government agencies.
By late last year the relationship between the curators and SARS had broken down completely. By agreement, SARS applied to the North Gauteng High Court to have them removed as curators. In that judgment, of November 2018, Judge Neil Tuchten agreed that the relationship had irretrievably broken down. He said “the core of the dispute… is the dilatoriness of SARS in making payments”.
But this clearly did not suit the Mpisanes, who promptly lodged an appeal against the court’s ruling.
To quickly settle the matter, curators Henk Strydom and Tshifhiwa Mudzusi themselves applied to the high court in Durban to be formally relieved of their duties. Judge Jacqui Henriques granted the order.
Zikhulise Cleaning Maintenance and Transport (ZCMT) is under provisional liquidation. While the Mpisanes have managed to continue with some of their businesses, the majority of their assets are linked to ZCMT. If that falls, so will everything else.
The Mpisanes’ delaying tactics are clearly outlined in several reports annexed to the curator’s application in the high court, Durban, including an April 2018 KPMG report authored by Shawn Williams appointed as a joint liquidator of ZCMT.
|The Mpisanes living the high life|
On 26 February 2016 SARS brought an application for the winding up of ZCMT. Soon afterwards Shauwn Mpisane, applied to have the business placed under business rescue. In a separate action she asked the court to review SARS’s decision not to enter into a payment arrangement with her. While both these court applications failed, they did succeed in delaying the liquidation by a further 18 months – until August 2017.
Then the liquidation application itself was postponed several times despite being on the unopposed court roll. It was finally set down for hearing on 23 April 2018 but just weeks before it was to be heard, ZCMT filed its intention to oppose. As a result the matter was taken off the court roll. It could take a year or more to have it re-enrolled for hearing.
During this time ZCMT had its main office lease transferred to a company owned by Shauwn’s sister – who is not part of SARS probe. When the curators arrived, they claimed the Zikhulise group no longer operated from the site, despite ample signage indicating the contrary. A search later turned up financial documents in a store room which showed that all the computers on site belonged to Zikhulise.
Shauwn Mpisane somehow – despite SARS’s having issued an application for the winding up of ZCMT – had ZCMT change its identity from a Closed Corporation to a (Pty) Ltd. This created uncertainty as to the extent of the powers of the liquidators. They have been obliged to apply to the North Gauteng High Court for clarification as to whether they are still the curators of the entity which now has a different corporate status.
On 23 November 2016 SARS issued an application for the sequestration of Shauwn and S’bu Mpisane. Bizarrely, it was only enrolled for 21 June 2019.
In order to hide land and vehicles, the Mpisanes ceded ownership – despite no records indicating any change of ownership – of a farm and several personal-use luxury vehicles to Durban businessman Ishmal Desai of Blitzvinnig Trading CC.
He claimed he had an agreement with the Mpisanes after obtaining several debt judgments against two Mpisane-linked companies – and that the agreement had been made an order of court. The curators were compelled to bring an application to the court in March 2017 to force Blitzvinnig to give them access to the cars. In one note by (liquidator) Williams, he said there was a “strong indication that the agreements relied upon by Blitzvinnig to justify its possession of the assets are a collusive ruse designed to conceal the intention to alienate and/or dissipate assets that can be used for the payment of tax debts”. Williams also said a cession agreement was signed in favour of a third party by the KwaDukuza Municipality – a client of ZCMT – despite SARS’s having informed them of the winding-up application.
At a second meeting at the Mpisane’s La Lucia mansion in December 2016 it was discovered that most of the furniture and electronics had been removed. The curator was told they were sold on auction although no proof of this was produced.
The curators’ first attempt to gain access to the family’s vaults at the International Bank Vaults, Gateway Shopping Centre, Umhlanga, failed. When they finally were able to get in, they “discovered that such vaults were empty”.
The Mpisanes purposely did not voluntarily submit any financial information to the curators; they misled the curators about the income of various companies; made false claims about the size of the staff; claimed tender documents were “privileged”; illegally transferred R500,000 to an obscure trust as “consultancy fees” among other payments – all of which required the curators to institute court action to have the money returned. The Mpisanes promptly lodged an official complaint that the curators were “destroying the business”.
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