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The Untouched Syndicate: Hawks & NPA's Inaction Against Gold and Tobacco Mafia Threatens SA's Financial Stability

Published November 06, 2024
3 months ago

The Financial Action Task Force's (FATF) greylisting of South Africa has cast a spotlight on the country's struggle with financial crimes. Among the stark illustrations of this struggle is the notable inaction of the Hawks and the National Prosecuting Authority (NPA) in the face of a sprawling gold and tobacco smuggling network, allegedly masterminded by Zimbabwean tobacco baron Simon Rudland and his associates. This network represents a blatant affront to the country's financial integrity and the government's commitment to clamp down on illicit financial flows.





The initial investigation into Rudland's network, sparked by the South African Revenue Service (Sars), disclosed an alarming web of money laundering, VAT scams, and illegal offshore fund transfers that undermined South Africa's financial systems. This network profited from collusions involving refineries, cash-in-transit companies, and even bank employees to launder billions.


The alleged complicit involvement of Sasfin Bank employees in a scheme to move untaxed funds out of the country, amounting to approximately R8.2 billion over the last decade, is particularly distressing. Following the discovery, the bank now confronts a staggering damages claim from Sars, which exceeds half of its balance sheet, a hefty fine, and is even considering the sale of its banking operations.


The Hawks and the NPA possess more than sufficient referrals for investigation, with over 100 suspects and entities identified. However, despite these leads and tangible action by Sars, including asset seizure from GLTC and voluntary cooperation by Sasfin Bank in search and seizure procedures, there has been a glaring absence of follow-through from these law enforcement bodies. As of now, no arrests have been made, nor has there been any official response to queries regarding the status of investigations and prosecutions.


The FATF's scrutiny, coupled with the 2024 deadline to shed the greylisting label that endangers the country's international financial standing, provides a clear mandate for action. FATF requirements highlight the necessity for a "sustained" hike in probing and charging serious and complex money laundering operations, especially those leveraging professional networks. Failure to do so compromises not only South Africa's reputation but also its economy, with potential restrictions on cross-border transactions, credit acquisition hurdles, and a deterrent effect on foreign investment.


With ample evidence at their disposal, one must question why the Hawks and the NPA have refrained from taking decisive actions against the entangled operatives of this financial scandal. Such reluctance seemingly contradicts the stipulations set forth by President Cyril Ramaphosa, the National Treasury, and the collaborative efforts pushed by Sars Commissioner Edward Kieswetter and NPA head Shamila Batohi to combat tax crime and non-compliance.


Is it a lack of capacity, will, or something more insidious at play impeding the Hawks and NPA from fulfilling their mandates to protect South Africa's financial ecosystems? This inaction, if uncorrected, obstructs South Africa's path to financial rectitude and leaves an open wound in the fabric of the nation's governance that the FATF has already judged unfavorably.


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