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Sasfin Bank, a niche lender newly acquired by African Bank Limited, a leading retail bank led by South African executive Kennedy Bungane, is now facing a significant $255-million civil lawsuit filed by the South African Revenue Service (Sars).
According to the claim, Sars alleges that Sasfin reportedly aided significant tax evasion over the past decade, involving multiple bank employees with claims that Sasfin’s assistance facilitated the unlawful transfer of at least $425.79 million linked to the Gold Leaf Tobacco money laundering scheme, bypassing tax obligations.
Allegations, Sasfin’s Response and Potential Repercussions
Most notably, Sars argues that Sasfin should be held liable for the damages incurred by the revenue service due to the alleged tax evasion. In response, Sasfin expressef disappointment, pledging cooperation with Sars and commitment to tax compliance.
However, the potential repercussions are significant. If Sasfin is found liable, the financial burden of R4.9 billion ($255 million), plus interest and costs, could significantly impact its operations. The case also raises concerns about potential lapses in risk and control measures within the bank’s foreign exchange division, which Sars cited in its allegations.
African Bank expansion with acquisition of Sasfin’s CEF and CPF Divisions
Earlier this month, Bungane oversaw a successful acquisition deal with Sasfin Bank Limited. Valued at R3.2 billion ($166 million), the transaction included Sasfin Bank’s Capital Equipment Finance Business (CEF Business) and Commercial Property Finance Business (CPF Business).
The finalized agreements, inked on Feb. 16 (as amended) and Feb. 22 at an adjusted composite value of approximately R2.9 billion ($150.5 million), solidifies African Bank’s position as a key player in the capital equipment and commercial property finance sectors.
Under the leadership of Bungane, African Bank has experienced massive growth, becoming one of the fastest-growing financial services providers in South Africa with active customer figures of 3.97 million active users in the year ending Sept. 30, 2023.
