The SA Revenue Service wants to launch an enquiry into the collapse of Hyundai Motor Distributors, in particular the actions of the consortium of banks that lent money to the company.
The SA Revenue Service (SARS) wants to launch an enquiry into the collapse of Hyundai Motor Distributors, in particular the actions of the consortium of banks that lent money to the company.
Although Hyundai Motor Distributors went bankrupt three years ago, there have been delays in winding-up the company, partly due to outstanding allegations of fraud against its owner, Billy Rautenbach, who is currently living in Zimbabwe.
Fifteen banks lent more than R900 million to Hyundai, but the only existing South African banks exposed were FirstRand, through its Wesbank finance subsidiary, and Bankfin (now part of Absa).
An SARS insider told the core issue was whether FirstRand secured the R18 million debt owed it by Hyundai after the company was placed in liquidation. According to the Insolvency Act, companies cannot secure their debts after the company has gone into liquidation, Monday’s report said.
Wesbank was paid R18 million from the estate based on the fact that it had a secured claim on Hyundai Motor Distributors.
According to , SARS believed that FirstRand may have secured itself only after the company was placed in liquidation and should be shunted to the back of the queue along with the other trade creditors.
"We are basically investigating the security that the banks claim they have on the Hyundai estate. We believe there was no security in place and that certain banks may have tried to create this security after the fact," an anonymous SARS official said.
However, Rautenbach's lawyer Nicolene Fourie says that as far as she can recall, all the banks had secured debts on the estate.
FirstRand also contend that their debt was secure in Hyundai, a SARS spokesman said. The SARS wanted to proceed with an inquiry in February, but opted instead to have "courteous discussions" with FirstRand and ABN Amro, the report said.
An inquiry is likely to happen only if SARS and the banks do not reach some agreement. Liquidators Deloitte & Touche Trust said an agreement did not appear on the cards, the report said.