Shuttleworth wins R250m from Reserve Bank, donates it to fight bureaucracy

Billionaire entrepreneur Mark Shuttleworth has won back a R250-million levy he had to pay to get some of his assets out of the country.

In a statement today, he said the Supreme Court of Appeal today found in his favour in a case about exchange controls.

"I will put the returned funds of R250m plus interest into a trust, to underwrite Constitutional Court cases on behalf of those whose circumstances deny them the ability to be heard where the counterparty is the State," he promptly announced.

Shuttleworth firstmade headlines 15 years ago when he sold his company, Thawte, which he had built from a garage in Cape Town, to US conglomerate Verisign for $575-million. In 2002, he spent $20-million to join the Russian spaceprogramme as a cosmonaut, training for a year before blasting off from a launch-pad in Kazakhstan. He was the first African in orbit and the world’s second paying visitor to space.

He had assets worth over R4.27-billion in South Africa when he emigrated in 2001, according to a previous Sapa report on his court case. He only transferred them out of the country in 2008 and 2009, each time paying a 10% levy.

Explaining his court battle, Shuttleworth said, "Exchange controls may appear to be targeted at a very small number of South Africans but their consequences are significant for all of us: especially those who are building relationships across Southern Africa such as migrant workers and small businesses seeking to participate in the growth of our continent".

"It is more expensive to work across South African borders than almost anywhere else on Earth, purely because the framework of exchange controls creates a cartel of banks authorized to act as the agents of the Reserve Bank in currency matters.

"We all pay a very high price for that cartel, and derive no real benefit in currency stability or security for that cost.

"Banks profit from exchange controls, but our economy is stifled, and the most vulnerable suffer most of all. Everything you buy is more expensive, South Africans are less globally competitive, and cross-border labourers, already vulnerable, pay the highest price of all – a shame we should work to address."

He said the ruling by the Supreme Court of Appeal found administrative and procedural fault with the Reserve Bank's actions, and returned the fees levied.

"This case, however, was not filed solely in pursuit of relief for me personally. We are now considering the continuation of the case in the Constitutional Court, to challenge exchange control on constitutional grounds and ensure that the benefits of today's ruling accrue to all South Africans."

Shuttleworth said it is because of exchange controls that he could not "pursue the work I am most interested in from within South Africa and which thus forced me to emigrate years ago".

"I pursue this case in the hope that the next generation of South Africans who want to build small but global operations will be able to do so without leaving the country."

A FUND FOR PEOPLE TO CHALLENGE GOVERNMENT

"This is a time in our history when it will be increasingly important to defend constitutional rights," Shuttleworth said.

"Historically, these are largely questions related to the balance of power between the state and the individual. For all the eloquence of our Constitution, it will be of little benefit to us all if it cannot be made binding on our government. It is expensive to litigate at the constitutional level, which means that such cases are imbalanced – the State has the resources to make its argument, but the individual often does not.

"For that reason, I will commit the funds returned to me to today by the SCA to a trust run by veteran and retired constitutional scholars, judges and lawyers, that will selectively fund cases on behalf of those unable to do so themselves, where the counterparty is the state.

"The mandate of this trust will extend beyond South African borders, to address constitutional rights for African citizens at large, on the grounds that our future in South Africa is in every way part of that great continent."