Sars has obtained a preservation order against the assets of Radovan Krejcir, allowing it to look at his business empire and trace hidden assets.
The South African Revenue Service (Sars) obtained a final preservation order on Thursday against the assets of Czech fugitive Radovan Krejcir.
Judge Ephraim Makgoba granted the order in the high court in Pretoria as Krejcir’s trial on charges of kidnapping and attempted murder continued in the high court in Johannesburg sitting in Palm Ridge.
The judge dismissed Krejcir’s last-minute attempt to postpone the taxman’s application to place his assets, along with those of his wife Katerina Krejcirova and a number of business entities and trusts, in the hands of a curator. The order would enable the curator to unravel Krejcir’s complicated business empire, trace hidden assets, and dispose of existing assets to cover his massive tax bill.
Nic Maritz SC, for Sars, argued that Krejcir used a network of companies, close corporations and trusts to channel money and evade payment of income tax. Sars official Johann Loggenberg said in an affidavit that Krejcir had under-disclosed his taxable income by more than R114.7-million, but told a tax inquiry he had no business interests and that his wife and mother supported him.
Despite a number of court orders setting deadlines for Krejcir to file an opposing affidavit, Krejcir claimed on Thursday he needed yet a further extension because he first wanted to consult with George Luca (also known as George Smith) before drawing up his final answer to the allegations.
Luca, who is accused of murdering strip club owner Lolly Jackson, was extradited to South Africa from Cyprus in February. Krejcir however claimed his lawyers had not yet been able to get hold of Luca to consult with him.
Sars alleged Krejcir had used a company called Groep 2 Beleggings, of which his wife was the sole director, to make alleged bogus loans, including a R3.5-million loan to Smith/Luca, for which he gave as security assets that had in fact been acquired by Krejcir himself in the Seychelles. When Luca “defaulted” on the loan, the company (or Krejcir) could “claim back” his assets without having to show where the income he used to pay for the assets came from, Maritz said. Krejcir had set up a “smoke and mirrors type of scheme”.
The assets included a yacht, various motorcycles, a Porsche Cayenne, and a Lamborghini.
Sars alleges Groep 2 Beleggings was used to buy two luxury properties for Krejcir and his family, that the company never conducted any genuine business and that its books revealed a number of questionable transactions. The company’s customers included self-confessed drug dealer Glenn Agliotti, who apparently borrowed R500 000 for his legal fees and also testified in the tax inquiry against Krejcir.
Agliotti’s estate was sequestrated in February this year because of a R70-million outstanding tax bill.
A close corporation called DKR Auto was allegedly used to buy numerous vehicles, but no business activities were reflected on its accounts.
Another entity, Scara Technologies CC, appeared to have been a party to fraudulent VAT schemes involving motor vehicle parts and diamonds, Sars alleged.
Krejcir claimed in an affidavit he was too busy with his criminal trial, his application for asylum and opposing his extradition to the Czech Republic to consult properly with his lawyers in order to file opposing papers in the preservation application. He further alleged he was unable to pay his attorneys because of the multitude of cases against him. He was struggling to find other attorneys willing to act for him because of the stigma attached to his name due to negative publicity, he claimed.
Meanwhile, in the high court in Johannesburg, another state witness took the stand on Thursday in the trial of Krejcir and five others.
Paul Mthabela was testifying in exchange for possible immunity from prosecution. Judge Collin Lamont ordered that photos of his face not be published in the media. Mthabela was allegedly connected to Vusi Peter Msimango, a self-confessed former criminal who was the first state witness to testify in the trial.
Mthabela told the court that he received a call from Desai Luphondo in June last year. Luphondo, the second accused in the trial, told him he needed his help.
He said a young man known as Doctor, who he had paid to place a bag of drugs on a plane to Australia, had failed to do so. Doctor worked for a cargo company at OR Tambo International Airport. Luphondo said Doctor told him police at the airport arrested him, Mthabela said.
They took the drugs as well as the R70 000 he had been paid to transport the drugs, which allegedly belonged to Krejcir. Mthabela called his friend, Msimango to help find the drugs.
He explained how he, Luphondo, and Msimango had met Doctor at a filling station in Katlehong. “Desai told Doctor ‘you’ll get me killed. Let’s go to the white man so you can explain to him what happened’,” said Mthabela. The white man he was referring to was Krejcir.
“He told Doctor that the white man wants to put you under a machine ... A lie detector test to see if you’re telling the truth,” Mthabela testified through an interpreter.
Left for KwaZulu-Natal
Another man who was with Doctor during this confrontation had said his brother was not going anywhere as Krejcir could kill him.
The three men went looking for Doctor the next day and were told by his grandmother that he had left for KwaZulu-Natal.
Doctor no longer answered their calls and was not at reporting for duty at the airport.
The next day Msimango joked as he told Mthabela how he and police officers driving in expensive cars had gone to kidnap Doctor’s brother, Bheki Lukhele, from his home in Katlehong the previous night. “He said Radovan Krejcir had burned the youngster with boiling water,” said Mthabela.
Msimango then took him to what they referred to as a safe house, where Lukhele was being kept captive under the watch of Luphondo. He found Lukhele with his face covered and his hands bound behind his back.
“Desai explained what [Msimango] had told me. He said the white man was cold-hearted. He had assaulted the youngster,” said Mthabela. He told the court he could see the wounds on Lukhele’s head.
“Desai said he would get the boy pills and some ointment. He said this was unfortunate. It wasn’t meant to happen,” Mthabela testified.
Krejcir, Luphondo, warrant officers Samuel Maropeng and George Nthoroane, Jan Lefu Mofokeng, and Siboniso Miya are charged with Lukhele’s kidnapping, assault, and attempted murder. They also face charges of dealing in drugs. All six men have pleaded not guilty.
The trial continues.– Sapa