Two former Square One subsidiaries were allegedly used in a bid to defraud the South African Revenue Services (SARS) of R23.8 million.
The two companies, both of which were sold off by Square One several years ago, are among a total of 18 firms that were allegedly used as vehicles to submit 198 fraudulent value-added tax (VAT) returns between 2007 and last March.
Details of the alleged fraud were revealed in court on Friday when the state presented its charges against former Square One chairman Garth Coetser and two other co-accused, Anton Meyer and Clifford Stevens.
The three have been accused of using several companies to submit fake VAT refund claims worth R216.3 million, of which SARS paid out R147.6 million before the alleged scam was uncovered.
According to the charge sheet, in ITWeb's possession, Coetser, Meyer and Stevens are linked to all 18 entities, either by being representatives, directors or members of the companies cited as having being used to allegedly defraud the taxman.
Coetser, through a company called Monkor Transfer Secretaries, was a director of all 18 companies. All three men have been charged with fraud, and face at least 15 years in jail if convicted.
Coetser, who was Square One's chairman until 10 May last year, handed himself over to police shortly after discovering there was warrant out for his arrest. Meyer is also a former Square One director, but stepped down in 2007.
Last May, Square One's directors distanced the company from Coetser's arrest and said “as far as we are aware, no Square One Group companies are implicated on the charge sheet presented to Coetser and other parties”.
Among the 18 companies cited in the charge sheet are two entities that used to belong to Square One Solutions.
Square One Document Solutions allegedly submitted claims worth R4.6 million between July 2008 and September 2009, although these weren't paid by SARS. Document Solutions, which was wholly-owned by Square One, was “disposed” of on 1 July 2008, according to its annual report for that year.
Square One Power Solutions was allegedly used to claim refunds totalling R19.2 million between August 2008 and March last year, of which SARS refunded R12.2 million. Power Solutions was sold on 1 January 2007 and Square One made a R363 458 profit on the sale, according to its 2007 annual report.
In the alternative, the state seeks to convict the three accused for contravening the VAT Act. Another charge, of forgery, has also been levelled against the three co-accused. The forgery charge is for allegedly submitting fake documents to SARS to back up the VAT claims.
Coetser was one of the founding members of Square One and was appointed as non-executive chairman in December 1999, but stepped down shortly before his arrest.
Square One was provisionally liquidated towards the end of May last year because of its “precarious cash flow situation”.
Coetser's lawyer, Piet du Plessis, from BDK Attorneys, says the matter has been postponed to 22 June when pre-trial issues will be sorted out. He doesn't anticipate the matter going to trial before early next year.
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