Provisional liquidation order granted against Shivambu’s brother

The North Gauteng High Court has granted the SA Revenue Service (Sars) a provisional liquidation order against a company owned by Brian Shivambu – the brother of EFF deputy president Floyd Shivambu.

The revenue collector said Shivambu owed a cumulative  amount of more than R11.5m in unpaid taxes [between 2017 and 2018], which he received from “gratuitous” payments by the defunct VBS Mutual Bank.

Sars relied on a forensic report that found that Shivambu who was the sole director and shareholder of Grand Azania directly benefited from money paid to the company.

“Mr Brian Shivambu, who is the sole director and shareholder of Grand Azania, benefited directly or indirectly from gratuitous payments from VBS Mutual Bank bank to the amount of R16,148,569. An amount of R6.4 million of the aforementioned amount was paid to Grand Azania,” the judgment read.

Judge Ronel Tolmay said Sars obtained a judgment on June 18, 2021 against Grand Azania for liquidation on an amount of R11m.

“This brings one to the requirements for a liquidation application. Section 344(f) of the Companies Act must be read with Section 345 in determining a company’s inability to pay its debts.

“Sars is a creditor of Grand Azania, which is indebted to Sars in an amount of no less than R100. Sars has issued a demand for payment and Grand Azania failed to make payment of the due amount and as a result Grand Azania is deemed to be unable to pay its debts.

“The enquiry into whether a respondent in liquidation proceedings is unable to pay its debts is a factual one. Judgment has been taken against the respondent on 18 June 2021 and the amount in respect of which the judgment was taken is still unpaid. The respondent is therefore deemed to be unable to pay its debts to Sars,” Tolmay said.

The judge added it was his view that Sars had made a case for a provisional liquidation order. The hearing on the final order will be held on April 24.

In their audit of the Grand Azania, Sars found it had generated an income of R828,101 and R7,611,833 for the 2017 and 2018 tax years respectively for which it did not file its tax returns.

Grand Azania was given an opportunity to challenge the adjustments made by Sars.  According to court papers, the company wrote to Sars disputing the amounts owed or the 2017-2018 period adding they were unreasonable and contained material procedural defects. .