SARS has won a court battle to place the estate of controversial property mogul Roux Shabangu and the Roux Shabangu Family Trust under provisional sequestration, reports Fin24.

Control of Shabangu's estate and the trust now lies with the Master of the High Court, blocking him from selling or disposing of any assets.

A hearing next month will determine whether the sequestration will be made final.

The ruling was handed down by Judge Anthony Millar at the Gauteng High Court (Pretoria) on Tuesday.

Shabangu's estate and his family trust were already the subject of a preservation order under a section of the Tax Administration Act. But the judge ruled Shabangu and other trustees had ‘simply ignored’ the order – which was supposed to block them from selling assets without the approval of a curator.

Shabangu rose to prominence in 2011 when it emerged that his Roux Property Fund was involved in a R500m deal to provide office space to SAPS in Pretoria and Durban.

An investigation by then-Public Protector Thuli Madonsela found the deal was ‘invalid’ and ‘fatally flawed’.

The resulting scandal led to the establishment of a board of inquiry to test then-Police Commissioner Bheki Cele's fitness for office. In 2012, former President Jacob Zuma fired Cele. The decision was set aside in 2019.

SARS has been trying to get Shabangu and companies linked to him to pay tax debts since 2012. That year, it issued him with an additional assessment of R6.4m for unpaid VAT and income tax. 

Millar said that Shabangu's disregard for the preservation order, coupled with the fact that he still owed millions of rands in tax debts, was sufficient for provisional sequestration.

On 19 September, when the case was heard, Shabangu owed the tax agency R1.3m, while his family trust owed R7m, according to Fin24.

In court, Shabangu's lawyers tried to argue that despite ‘indebtedness and acts of insolvency,’ the court should decline the provisional order for their sequestration, as there was no ‘advantage to creditors’ in doing so. Instead of sequestration, the tax agency should have used the Tax Administration Act (TAA) to recover what it was owed.

These arguments failed to convince Millar, in part due to outstanding questions about how Shabangu was continuing to maintain what SARS described as his ‘lavish lifestyle’.

Millar noted that Shabangu failed to disclose the source of the funds from which his lifestyle is financed.

The court also heard that in March – when the trusts were already subject to a preservation order – Shabangu attempted to sell shares held by the trust.

The sale document was ‘somewhat bizarrely’ also backdated to 19 December 2023. 

In any case, the sale was invalid Millar concluded that neither Shabangu nor the trustees of the trust ‘regarded themselves as bound by the preservation order’.

‘The blatant disregard for the preservation order is egregious and makes plain the necessity for the granting of an order for provisional sequestration.’

Full Fin24 report