Security boss fined R500?K

2014-03-10 00:00

SECURITY company boss Mahomed Yacoob paid a R500 000 fine on behalf of Khuselani Security and Risk Management Services on Friday in terms of a plea agreement with the state over R9,4 million in VAT fraud perpetrated by the company between 2006 and 2007.

A further fine of R1 million was suspended for five years on condition the company is not again convicted of fraud, theft or any similar offence.

In the plea documents, Yacoob laid the blame for the fraud at the door of the company’s former financial manager, the late Robin Hazell, on whose death by suicide a “trail of debt and fraud emerged”.

Hazell was said to have “unilaterally and exclusively” dealt with all the daily financial affairs of the company, including submitting statutory returns to the SA Revenue Services (SARS).

The plea made the point that the operations director at the time (Yacoob) “did not participate or monitor this process and made the assumption that Hazell fully complied with” Khuselani’s obligations.

On becoming aware of the debts and fraud following Hazell’s death, swift action was taken to liquidate the entity and the money owed to SARS (R9 444 412,19) was paid in full.

Other factors cited in mitigation were that the company (represented by Yacoob) pleaded guilty without wasting the court’s time and taxpayers’ money; had co-operated throughout with SARS investigators, had re-paid SARS the entire assessed amount without appeal or delay and the fiscus did not suffer a loss.

In aggravation the court took into account that the offence was committed over time, and during that period the company had an unfair competitive advantage in industry due to not complying with tax legislation,which led to a “healthier cash flow than it ordinarily would have”; and that the fiscus was deprived of the revenue timeously.

Regional court magistrate Rose Mog­wera imposed the sentence that was recommended to the court in terms of the agreement, as she found it was appropriate in the circumstances.

The Witness reported on February 26 that the high court had granted an order reversing the voluntary liquidation of Khuselani Security and Risk Management in order that the entity could be re-registered so that it, and Yacoob, could enter into a plea agreement with the state in relation to the criminal charges.

In a statement issued on Yacoob’s behalf by his attorney Asif Latib after the case on Friday, Yacoob said he’d felt “morally and ethically” compelled to represent the “defunct entity” in the plea bargain.

“He [Yacoob] confirmed that it was a harsh lesson for all entities to be cautious over delegation of financial duties,” the statement said.

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