VBS scandal: SARS demands R28.2m from Brian Shivambu, displays clear connection to Floyd

 

By Pauli Van Wyk• 15 August 2021

 Illustrative image | Sources: EFF deputy president Floyd Shivambu. (Photo: Gallo Images / Misha Jordaan) | Brian Shivambu. (Photo: Twitter) | VBS Mutual Bank customers in long queues outside the bank. (Photo: Antonio Muchave / Sowetan) | Nadine Hutton / Bloomberg via Getty Images) | Gallo Images / Sharon Seretlo) | Adobe Stock

SARS’s Criminal and Illicit Economic Activities division traced stolen VBS money through two front companies into EFF deputy leader Floyd Shivambu’s FNB Private Wealth bank account. Shivambu’s sustained charade of ‘fighting for the poor’ instead of robbing them is, for the first time, highlighted by a state institution in open court proceedings following the taxman’s investigation into his brother, Brian, and the missing VBS millions.

Correction: In an earlier version of this story, one of the graphics used the image of Lorna Maseko, Floyd Shivambu’s current girlfriend,  instead of that of Siphesihle Pezi,  Shivambu’s then wife. It has since been corrected. We apologise for the error.

The South African Revenue Service (SARS) has slapped two companies Brian Shivambu is the sole owner of with a R28.2-million tax bill. This eye-watering amount includes penalties because Shivambu attempted to evade paying tax for the periods 2017, 2018 and 2019. 

Shivambu “defrauded” VBS Mutual Bank out of about R16-million, SARS auditors and investigators found. He “committed a criminal offence” by not declaring this as income tax and VAT – conduct which is regarded as “intentional tax evasion” – and, when contacted by SARS auditors and investigators, acted in an “obstructive” manner and ignored most of their communications and requests.

Being dismissive of SARS, of course, compounded his problems. Shivambu’s conduct earned his companies 125% and 200% tax penalties, respectively. SARS further found the companies hopelessly insolvent and brought two liquidation applications against Sgameka Projects and Grand Azania, filed at the High Court in Pretoria in July.

Grand Azania and Sgameka Projects, SARS told the court, “have been utilised by its director and only shareholder, Brian Shivambu, as the vehicles through which he defrauded the VBS Mutual Bank of approximately R16-million”.

These open court procedures include reams of tax assessments and bank statements in support of SARS’ extensive investigation – including six months’ worth of bank statements from EFF deputy leader Floyd Shivambu’s FNB Private Wealth bank account, dated 25 May to 24 November 2017.

There were no legitimate reasons for any of the cash and “loans” flowing from VBS Mutual Bank, SARS’s Criminal and Illicit Economic Activities division told the court. SARS further regards all of it as taxable “income”.

The court papers do not go into the details of Floyd Shivambu’s finances, as these particular applications focus on Brian Shivambu’s companies. SARS, highlighting money flows emanating from VBS Mutual Bank, did, however, find in relation to Floyd Shivambu that:

• Grand Azania paid R170,000 into Floyd Shivambu’s FNB Private Wealth bank account. Scorpio will show that Shivambu received much more – we traced about R3.6-million in VBS loot flowing to his Private Wealth account;
• Grand Azania paid R140,000 to Trenditrade 23 (Pty) Ltd, trading as Land Rover Sandton, Sars found. This was Floyd Shivambu’s Range Rover, independent investigations by Scorpio and Mail & Guardian showed. Scorpio found that Grand Azania actually paid R1,118,000 towards Shivambu’s Range Rover;
• Sgameka Projects paid an additional R680,000 to Trenditrade 23 Pty Ltd for Shivambu’s Range Rover;
• Sgameka Projects paid R180,000 into Shivambu’s FNB Private Wealth account;
• Sgameka Projects paid a total of about R1.3-million to two accounts owned by the Economic Freedom Fighters. Scorpio found that Grand Azania seems to have paid another R450,000 in stolen VBS money to the EFF;
• Brian Shivambu’s Nedbank account only received R289,756, SARS investigators say, paid from Sgameka Projects – he was clearly a front and bagman for his brother;
• WesBank received a R388,078 payment from Sgameka Projects, “in favour of NF Shivambu” – it stands for Nyiko Floyd Shivambu;
• Sgameka Projects paid R4.8-million in VBS loot to Mahuna Investments, SARS said – a company Scorpio has found is a front for EFF leader Julius Malema; and
• Sgameka Projects has a R1.46-million home loan for a house used by the Shivambu parents. The elderly couple is now in an invidious position, of their sons’ making, as they are living in a house regarded as the proceeds of crime.