Duma ka Ndlovu, two others in court on R26m tax fraud charges

TV producer and businessman Duma ka Ndlovu, Rodney Mutsharini and Maxwell Mloyi appeared in the Johannesburg specialised commercial crimes court on Tuesday on 18 charges of tax fraud relating to Ndlovu’s personal and company income tax valued at about R26m. 

The three were arrested on Monday and charged.

Mutsharini and Mloyi made a brief appearance on the day of their arrest and their case was rolled over to Tuesday for a bail application. Ndlovu made his first court appearance on Tuesday and also applied for bail. 

The court granted Ndlovu R100,000 bail while Mutsharini and Mloyi were granted R50,000 bail each. 

It is alleged Mutsharini, a registered tax practitioner, helped Ndlovu with his personal income tax and Mloyi, an unregistered tax practitioner, helped Ndlovu with his company income tax. 

The state alleged Mutsharini submitted Ndlovu’s personal income tax returns for the 2016, 2017, 2018 and 2019 assessment years. It said misrepresentations that resulted in actual financial losses to Sars totalling R19.2m were made in the personal income tax returns filed for the four years of assessment.

The state accused Mloyi of acting with common intent with Ndlovu when they made representations in the corporate income tax returns that were submitted to Sars.

In a joint statement, the Investigating Directorate Against Corruption (IDAC) and Sars said the case was postponed until November 11 for further investigation.

The court ordered Mloyi and Mutsharini to surrender their travel documents, report to their nearest police stations every Monday and, should they wish to travel outside SA, make an application to the court.  Ndlovu was ordered to report to Sandton police station every Monday or Wednesday, notify the clerk of the court of his KwaZulu-Natal change of address and submit an application to the court should he wish to travel outside South Africa.

“Their arrests and court appearances are a result of strengthened collaboration between Sars and IDAC of the (National Prosecuting Authority), which uncovered an alleged collusion between the three in misrepresenting the tax affairs of Ndlovu and his company.” 

The organisations said President Cyril Ramaphosa established a commission of inquiry into the tax administration and governance by Sars and appointed judge Robert Nugent as the commissioner.

In May 2018, Nugent made recommendations for investigations to be conducted into the allegation of suspected fraud, corruption and procurement irregularities in Sars. 

“Subsequently, IDAC authorised an investigation into the awarding of contracts by Sars, and the commissioner of Sars was notified of these investigations with a view to mutual co-operation and information sharing.” 

The investigations discovered that a company which formed part of the investigations, Bain and Company, was contracted by Sars to render services.

“This company allegedly subcontracted Ambrobite (Pty) Ltd, now known as Kanoboya Consulting (Pty) Ltd, owned by Ndlovu, to render strategic and project management services between November 2013 and September 2016.

“This was, however, misrepresented by Ndlovu and his tax practitioner, Mloyi, when submitting tax returns to Sars. Mloyi together with Ndlovu declared to Sars that the company was dormant and that it never traded during the tax period 2013 to 2017, resulting in a financial loss to Sars,” said IDAC and Sars. 

In relation to his personal income tax, it was discovered that Ndlovu, together with Mutsharini, allegedly misrepresented his personal income tax return for the period 2016 to 2019. 

Furthermore, they allegedly submitted his personal income tax return for the year 2020 and 2022, but neglecting to make a submission for the year 2021, which resulted in another financial loss to Sars.

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