EXCLUSIVE: Taxman guns for Bosasa boss Gavin Watson

2019-06-04 06:00
Bosasa CEO Gavin Watson. (Supplied)

Bosasa CEO Gavin Watson. (Supplied)

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The South African Revenue Service (SARS) is gunning for corruption accused facilities management and security company Bosasa and its boss, Gavin Watson, as it seeks to determine whether Watson hid funds from the taxman, and exactly how much he may owe in unpaid taxes.

News24 has learned that a tax inquiry is scheduled to get under way on Tuesday to get to the bottom of allegations before the Zondo commission of inquiry into state capture, and in media reports.

More than 20 witnesses are expected to appear before the inquiry, which is a process closed to the public as it relates to tax matters, which SARS is under legislative obligation to keep confidential.  

Advocate Piet Marais SC will head the inquiry, and he will have the power to subpoena witnesses to give evidence under oath.

Marais also headed a tax inquiry into EFF leader Julius Malema in 2012.

The Gauteng High Court in Pretoria granted SARS an order establishing the inquiry on March 29, but the order was sealed, prohibiting access to the documents.

The inquiry will mainly focus on establishing the facts surrounding allegations that Watson and the companies in the Bosasa stable failed to comply with tax obligations and sought to hide assets from the tax man.

Watson, it emerged, paid senior staff cash on a monthly basis, and allegedly instructed his close associates to structure deals to hide the truth from SARS.

READ: Flights, cash and cars: Here are the charges bringing down the Bosasa empire 

These payments were described by former Bosasa chief operations officer Angelo Agrizzi during testimony before the commission as being an incentive for staff members to keep quiet about alleged bribery practices that continued for years.

Agrizzi estimated that tens of millions of rand were paid in bribes to, mainly, department of correctional services and social development officials in exchange for lucrative multibillion-rand tenders.

He spent more than 10 days on the witness stand, delivering bombshell testimony of alleged illegality involving corrupt tenders, bribes and how the company had allegedly bribed its way after being in hot water with the National Prosecuting Authority.

Between 2006 to date, Bosasa scored government contracts worth an estimated R12bn, National Treasury data shows.

In 2007, the Special Investigating Unit (SIU) finalised a report that found bribes were paid to former correctional services commissioner Linda Mti and former correctional services chief financial officer Patrick Gillingham in exchange for fencing tenders worth hundreds of millions of rand.


Bosasa CEO Gavin Watson with former president Jacob Zuma during a visit to Bosasa head office in Krugersdorpin in April 2015. (Supplied)

Gillingham and Mti, together with Agrizzi and other Bosasa staff were charged in February this year with several counts of money laundering and violations of the Public Finance Management Act as well as the Prevention and Combating of Corrupt Activities Act.

Agrizzi, former Bosasa chief financial officer Andries van Tonder and senior Bosasa manager Frans Vorster, who were also charged, all appeared before the Zondo commission to give evidence against Bosasa.  

The five men face charges relating to four tenders, worth roughly R2bn, which correctional services awarded to Bosasa between May 2004 and December 2005 and alleged bribes paid to Mti and Gillingham. The transactions described in testimony before the Zondo commission all carry tax implications. 

Bosasa changed its name to African Global Operations in 2017, in an attempt to avoid the public scrutiny that the Bosasa name carried.

The name-change also coincided with a renewed vision inside the company to expand its business into Africa with President Cyril Ramaphosa's son, Andile, and Chinese surveillance technology giant Dahua Technology.

ALSO READ: From China to Krugersdorp: Andile Ramaphosa and the Bosasa ‘billions’

But the implications may run far wider than just Watson's personal tax affairs.

News24 also previously revealed that the company donated a conservatively estimated R40m to the ANC, according to a source with intimate knowledge of Bosasa's affairs, over nearly two decades.

Despite allegations of corruption surrounding Bosasa being in the public domain since 2007, former ANC treasurer general Zweli Mkhize admitted the party continued to accept donations from it. 

Donations carry tax implications for both parties involved and could spell trouble for the ANC if tax donations were not properly managed.

ALSO READ: Bosasa CEO’s ‘hidden’ R500k donation to Ramaphosa deconstructed

A hidden donation of R500 000 was also given to Ramaphosa's presidential campaign in the run-up to the ANC's national elective conference by Watson.

Watson constructed the transaction in such a way as to hide the origin of the funds from the campaign team and to distance himself from the funds personally, News24 previously reported.

The funds were paid from Watson's personal account to a business account of Miotto Trading and Advisory Services, a Bosasa front company. From Miotto, the R500 000 was paid to an attorney's trust account held by Edelstein, Farber Grobler, a law firm in Sandton that managed the CR17 campaign funds.

The donation, and Ramaphosa's comments over the business his son Andile did with Bosasa before Parliament, are subject to an investigation by Public Protector Busisiwe Mkhwebane. 

News24 requested comment from SARS and Watson, which had not been forthcoming at the time of writing. This article will be updated when a response is received.

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Read more on:    bosasa  |  sars  |  gavin watson  |  state capture commission  |  corruption

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