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Sasfin Challenges SARS' R4.87 Billion Claim Amidst Allegations of Money Laundering

Published February 28, 2024
4 months ago

Sasfin Bank, a well-known financial institution in South Africa, has found itself embroiled in a contentious legal dispute with the South African Revenue Service (SARS). The tax authority lodged a mammoth R4.87 billion damages claim against Sasfin, alleging that former employees and clients of the banking business were involved in money laundering operations and engaged in bribery. According to Sasfin CEO Michael Sassoon, these acts were in concert with an international gold smuggling ring that had established connections with Zimbabwe.

The bank's response to the claim was swift and forceful, with Sassoon confirming, via an email statement, a strong denial of the litigation brought forth by SARS. He has indicated to the public that while the lawsuit spells a drawn-out court trial, it is not projected to conclude anytime before several years have elapsed, hinting at the complex nature of white-collar crime litigation.

This legal entanglement finds its roots in occurrences traced back to 2014, when it came to light that a criminal syndicate had ensnared former Sasfin Bank employees who operated far beyond the bounds of their formal roles and responsibilities. As a result of these illicit activities, SARS claims to have fallen short in collecting due income tax, value-added tax (VAT), and concomitant penalties from specified foreign-exchange bank clients, which have ostensibly prompted the multi-billion Rand claim.

Nonetheless, Sasfin insists that when it became cognizant of the nefarious activities, decisive measures were enacted. An independent probe was commissioned, leading to the swift severance of professional ties with those clients and employees implicated, as well as the initiation of criminal proceedings against the errant parties.

Furthermore, Sassoon has expressed his disdain towards the notion that financial institutions should be held accountable for the tax evasion of their clientele, signaling a strong point of contention between Sasfin and SARS. In the wake of the claim, Sasfin has sought legal advice, presumably to strengthen their defense, and insists no liability is to be recognized in relation to the claim. Importantly, Sassoon delineates that this is not an action concerning Sasfin's own tax contributions, but rather a civil claim for damages.

SARS, having been approached for their take on this burgeoning legal standoff, has opted to withhold any public comment, as conveyed to Bloomberg News.

As the bank positions itself to confront these allegations, there remains an assurance from its CEO that Sasfin's financial standing and capital position remain steadfast and unaffected by this pretentious claim.

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