Judge says FirstRand tax scheme was 'suspect'

Judge Jeanette Traverso, hearing FirstRand’s urgent application for an interdict against the satirical magazine NoseWeek in the Cape High Court, said on Wednesday that there seemed to be little doubt that the tax-avoidance scheme at the heart of the case “is suspect”.

Counsel for the applicant, Nick Maritz, denied that the scheme was illegal, and said the matter has never been decided by a court. He accused the publisher of NoseWeek, Martin Welz, of setting himself up as both judge and jury, and deciding on his own that it was illegal.

Counsel for publishers Caxton Press, Theoniel Potgieter, said that nowhere has the bank ever claimed that the scheme is legal.
“All they have ever said is that it was not proved to be illegal,” he said. “That is not the same thing.”

Judge Traverso also wondered in court how it was that FirstRand, against whom allegations in connection with the scheme have already been made by NoseWeek in the past, could claim to act on behalf of its clients.

She told Maritz that it did not seem to her that the clause in the law relating to class actions covers FirstRand’s actions. “What do these people have in common?” she asked.

“They have in common that they are about to be defamed by NoseWeek,” Maritz replied.

The bank is trying to prevent the magazine from publishing a list of prominent clients of the banks who were involved in a complicated tax-avoidance scheme drawn up by its former private banking arm, Ansbacher,

The respondents, Welz and Caxton, argue that they would defend a defamation case by showing that what they say is true and in the public interest to publish.

The case continues this afternoon.—I-Net Bridge