A director of HRA Trading (Pty) Ltd and his bookkeeper pleaded guilty to charges of fraud and tax evasion in the Special Commercial Crimes Court in Kimberley this week.
A DIRECTOR of HRA Trading (Pty) Ltd, Rumesh Bavasah, and his bookkeeper, Ebel Anwar, pleaded guilty to charges of fraud and tax evasion in the Special Commercial Crimes Court in Kimberley this week.
HRA Trading was awarded a R90 million tender by the Northern Cape Department of Economic Development and Tourism for events management and promotion of the Kumba skate park in Kimberley in 2019.
The company submitted false company income tax and false VAT returns to the South African Revenue Service (Sars) in 2018 with the intent to obtain a tax refund, where the accused unduly benefited from R6.9 million.
The State indicated that Anwar, who submitted the tax forms, was not a tax practitioner at the time when the misrepresentations were made to Sars.
Charges against company director Ukesh Bavasah were withdrawn on September 18.
The accused were issued with summons to appear in court in January following an investigation by the Sars criminal investigation unit.
According to the charges, Rumesh Bavasah and Anwar submitted VAT returns on behalf of HRA Trading (Pty) Ltd in 2017, 2018 and 2020.
The company generated income of R14.3 million but failed to pay taxes to Sars while the VAT returns reflected a nil amount.
This resulted in Sars suffering losses to the value of R2.5 million and R4.4 million.
The State indicated that the company was still not tax compliant.
“The plea of guilty is a strong indication that the State has a strong case against the accused persons.”
Output tax received was deposited into the company bank account at First National Bank where Rumesh and Ukesh were signatories.
A R3 million confiscation order was made in terms of the Prevention of Organised Crime Act.
In mitigation of sentence, it was acknowledged that the accused have no previous convictions and were considered to be first-time offenders
The State agreed that the accused had shown remorse for their actions and had co-operated with the State agencies.
The company indicated that it has since employed new auditors to ensure tax compliance and other payroll responsibilities.
Rumesh is currently working as a diamond diver on the West coast in the Namakwa District while Anwar is being supported by his family.
Magistrate Vernon Smith sentenced HRA Trading to R1 million suspended for five years on condition that it is not convicted of fraud during this period.
He handed a 15-year imprisonment sentence to Rumesh that will be suspended for five years on condition that he is not convicted of fraud during this period.
Smith also ordered him to pay R3 million to Sars within seven days after entering into the plea agreement.
A further R3.9 million must be paid in monthly instalments of no less than R66 017.67 over the next 60 months.
Anwar was sentenced to 15 years imprisonment suspended for five years on the condition that he is not convicted of fraud during the suspension period.
The accused were represented by Herholdt Robertson, while Martin Molokwane appeared on behalf of the State.
