Accord Technologies is expected to report a loss for the six months to 30 September 2000 after having to pay R36.48 million to the SA Revenue Service (SARS) as a result of an apparent evasion of value added tax (VAT).
Of this amount, R30 million consists of the VAT payable, while the balance is made up of interest and penalties.
Accord will pay a net R29.2 million, as amounts due to the company in terms of unpaid refunds and interest will be deducted from the full amount.
Accord and SARS say in a joint announcement that although the evasion appears to have been orchestrated by third-parties, Accord, as the registered vendor, is held responsible for the loss to SARS.
They add that the payment is in full and final settlement of the claims by SARS and does not constitute an admission of intentional evasion of VAT by Accord.
"In terms of the agreement of settlement, Accord has offered SARS full co-operation in relation to any investigations concerning the identity of persons involved in such transactions, with a view to achieving criminal prosecutions," they say.
Accord adds that the net amount has been settled on its behalf by Prism Holdings out of the R88 million due to Accord from the disposal of the Datagate and Accord Business Solutions businesses.
The results for the year to 31 March 2000 will be restated.
"As a result of the SARS settlement, additional investigative work, initiated by the directors, has raised the need for additional material adjustments which will further reduce reported earnings for the year ended 31 March 2000."
Audited figures are expected to be released within a fortnight.
The group says that as a result of the issue and the disruptive influence on daily operations, it will report a loss for the six months to September.
It adds that it is relying on the co-operation of SARS to provide information about culpable parties which will allow it to recover the settlement amount and damages.
"The directors would like to stress that the company did not derive any benefit as a result of the apparent evasion of VAT."
Accord also says the Prism deal has become unconditional, and that announcements regarding the reconstitution of the Accord board will be made shortly.
The share, which closed as high as 179c in February, was trading at 17c this morning, 2c up on yesterday`s close.
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