Court orders SARB to repay Shuttleworth over R250 mil - CNBC Africa

Court orders SARB to repay Shuttleworth over R250 mil

Southern Africa

by Trust Matsilele 0

Court orders SARB to repay Mark Shuttleworth over 250 million rand. PHOTO: The South African

The billionaire tycoon was compelled to pay about 250 million rand by the South Africa Reserve Bank (SARB) in 2012 to secure the release of his blocked assets.

The SARB blocked his assets following an error in calculation of how much he owed the central bank on levy charges.

“In 2001 Shuttleworth emigrated to the Isle of Man, a British Crown dependency and a tax-efficient jurisdiction. On his emigration, Exchange Control Regulations, promulgated in terms of s 9 of the Currency and Exchanges Act 9 of 1933 had the effect of blocking the expatriation of his assets from South Africa,” read the Supreme Court media statement.

According to the court, the aggregate value of his blocked loan accounts was 4.2 billion rand.

In June 2009, Shuttleworth decided to transfer his remaining assets out of South Africa and applied to the reserve bank for permission to do so.

However, due to an error in calculating the ten per cent exit levy, Shuttleworth was later informed that the amount that could be transferred out of the country was 1.4 billion rand, which would ensure that the exit payment represented ten per cent of the total amount.

“Upon advice sought regarding the lawfulness of the ten per cent levy, he was advised that it was unlawful and challenged same,” read the statement.

“Significantly, Shuttleworth however did not challenge the principle of exchange control. He accepted that exchange control was necessary. He contended, however, that many facets of the current exchange regime was unconstitutional.”

The SARB refused to release Shuttleworth’s blocked assets until he paid the ten per cent exit levy.

(READ MOREShuttleworth and SARB granted leave to appeal)

It is at this point that Shuttleworth paid an amount of 250 million rand under protest to secure the release of his blocked assets.

When the reserve bank refused to reconsider its decision, Shuttleworth launched an application in the North Gauteng High Court in which he sought repayment of that sum as well as fairly wide-ranging orders to the effect that various provisions of our exchange control regime was unconstitutional and invalid.

Shuttleworth made his fortune through Thawte Consulting, a general internet consultancy that progressed to specialising in security for electronic commerce.

Thawte shot to international prominence by assisting businesses throughout the world to engage in secure transactions over the web.

In 1999 Shuttleworth sold Thawte Consulting for 575 million US dollars. 

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