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02 Mar 2015 12:22
The Supreme Court of Appeal ordered that the South African Reserve Bank repay Mark Shuttleworth R250-million plus interest in a case about exchange controls. (Gallo)
The Constitutional Court will on Tuesday hear the South African Reserve Bank’s (SARB) application for leave to appeal a Supreme Court of Appeal (SCA) judgment in favour of entrepreneur Mark Shuttleworth.
Last year, the SCA ordered that the SARB repay Shuttleworth R250-million plus interest in a case about exchange controls.
The matter dates back to March 5 2008, when Shuttleworth applied to the SARB to transfer R1.5-billion out of South Africa when he moved to the Isle of Man.
This transfer application had to be done through an authorised dealer bank, and Shuttleworth elected Standard Bank. The application was granted subject to the payment of an exit levy calculated at R165-million.
A calculating error in working out the 10% levy led to Shuttleworth being told later that the amount that could be transferred out of the country was R1.485-billion, bringing the exit payment to 10% of the total amount.
In June 2009 Shuttleworth decided to transfer his remaining assets out of South Africa.
He was advised that the 10% levy was unlawful and challenged it, contending that aspects of the exchange regime were unconstitutional.
Exit levy paid under protestShuttleworth paid an amount of R250 474 893 under protest, as the 10% exit levy necessary for the release of his blocked assets.
He approached the high court in Pretoria, which did not order that he be repaid but did strike down certain provisions of the Currency and Exchanges Act and the Exchange Control Regulations.
Shuttleworth approached the SCA to appeal against the high court’s refusal to order repayment, while the SARB, the minister of finance, and the president cross-appealed against the orders of invalidity.
The SCA found that Shuttleworth’s payment under protest indicated that the payment was not a voluntary one and that he reserved the right to seek its reversal.
The SARB’s imposition of the 10% exit levy was set aside, and so too were the high court’s declarations of invalidity of the exchange legislation and regulations.
The Constitutional Court will also hear an application to cross-appeal the SCA judgment by Shuttleworth in relation to the lawfulness of certain aspects of South Africa’s exchange control system. – Sapa
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