A curator has been mandated by a court to liquidate the assets of high-profile entrepreneur Roux Shabangu, who has notably underpaid his unchallenged R21.5-million ($1.16 million) tax obligation to the South African Revenue Service (SARS), concurrently spending extravagantly on personal luxuries, according to a news report by Fin24.
The Gauteng High Court in Pretoria has conferred authority on a curator to execute the sale of an extensive range of assets belonging to Shabangu and the Roux Shabangu Family Trust. SARS records indicate that Shabangu has settled only R75,000 ($4,077) of his substantial back taxes of R21.5 million ($1.16 million).
The tax authority highlighted to the court that Shabangu spends as much as R1 million ($54,300) per month on personal indulgences while disregarding his tax obligations. His expenditures included payments for several high-end vehicles, like a BMW X7 M5 and a BMW X6 M Competition, part of 15 vehicles associated with him in the national car register, eNatis.
SARS’s engagement with Shabangu dates back to late 2012, stemming from an initial assessment of R6.4 million ($348,000) due to unpaid VAT and income tax. Shabangu’s public profile escalated in 2011 amidst revelations that his Roux Property Fund had engaged in a questionable R500 million contract to furnish the South African Police Service with office accommodations in Pretoria.
This deal, subsequently deemed “fatally flawed” by then-Public Protector Thuli Madonsela, instigated a scandal necessitating an inquiry into the suitability of then-Police Commissioner Bheki Cele, culminating in his termination by ex-President Jacob Zuma in 2012 – a resolution overturned in 2019.
SARS disclosed that the initial R6.4-million ($374,938) tax discrepancy identified in 2012 has spiraled to approximately R65 million ($3.53 million). This sum encompasses debts accrued by Shabangu, his family trust, and his enterprise, Majestic Silver, now beholden for R36.3 million ($1.97 million) and under business rescue proceedings.
Judge Norman Davis of the High Court acknowledged the uncontested nature of Shabangu’s tax delinquency, obviating the need for deliberation over the actual indebtedness to SARS by Shabangu, his trust, and Majestic Silver. The focus rested on whether asset conservation and curator-managed liquidation were requisite for debt redress. Concurring with SARS, Davis recognized indications of Shabangu’s ongoing asset depletion.
However, Davis’s ruling excluded Majestic Silver, as noted by Fin24, given its separate legal considerations. Proceeds from the curator’s asset sales are designated for a trust, pending a court application by SARS for fund disbursement.
Shabangu is the founder of JB Holdings, a conglomerate with tentacles in commercial real estate, mining, oil and gas, and telecoms.
