Company and two directors sentenced for R7-million tax fraud, ordered to pay SARS debt | News24

Company and two directors sentenced for R7-million tax fraud, ordered to pay SARS debt | News24

The initial three accused are Rumesh Bavasah, Ukesh Bavasah and Ebel Anwar, but the charges against Ukesh Bavasah were withdrawn whilst Rumesh Bavasah and Anwar entered into a plea agreement.

The initial three accused are Rumesh Bavasah, Ukesh Bavasah and Ebel Anwar, but the charges against Ukesh Bavasah were withdrawn whilst Rumesh Bavasah and Anwar entered into a plea agreement.

PHOTO: Charné Kemp

A company and two of its directors who were involved in the controversial Kimberley Diamond Cup Skateboard Championship (KDC), formerly the Maloof Money Cup, pleaded guilty to several charges of tax fraud involving R7 million in the Specialised Commercial Crimes Court in Kimberley on 18 September.

According to a plea agreement, they were given suspended sentences and the debt to the South African Revenue Service (SARS) must be paid within five years. A third person was acquitted.

Tender considered as ‘suspicious’

The company, HRA Trading events management, was in the news in 2019 just after they won a multimillion-rand tender from the Department of Economic Development and Tourism to organise the KDC Skateboard Championship. Opposition parties considered it suspicious.

According to a DA statement, HRA Trading’s company address was the same as that of FISE Africa, which was owned by Komalin Packirisamy, the brother of the department’s chief financial officer and chairperson of the tender award committee, Kuberin Packirisamy. During a visit to HRA’s offices, the DA also found vans with ANC badges at the premises.

HRA Trading and its directors, Rumesh Bavasah and Ebel Anwar, admitted in their plea that they conspired to violate the Tax Administration Act and defraud SARS. They submitted false returns for Company Income Tax (CIT) and Value Added Tax (VAT) for 2018 to the tune of almost R7 million.

HRA Trading’s fine of R1 million was suspended for five years. Bavasah’s sentence of 15 years imprisonment was suspended for five years on condition that he is not found guilty of fraud again during the period of suspension. He must pay amounts of R2 558 860, R441 000 and R3.9 million over five years in installments of no less than R66 000 per month. Anwar’s sentence of 15 years’ imprisonment was suspended for five years.

Regional Magistrate Vernon Smith confirmed the agreed sentences. Earlier, Smith acquitted Ukesh Bavasa of the charges.

According to a letter and report to the department in July 2019, the Auditor-General (AG) expressed concern about the tender to organise the championship, build offices and supply office equipment.

‘Not a tender requirement’

It appears that HRA Trading not only organised the skateboarding championship, but also undertook construction work and provided furniture even though this was not a tender requirement.

HRA Trading was not registered with the Construction Industry Development Board (CIBD) in terms of requirements of the procurement regulations. No evidence of a supply chain management process was produced nor was a tender for the upgrade and improvement of various skateparks advertised on the CIBD website.

Although HRA erected an office building at the Kumba Skateboard Park in Kimberley and provided office equipment and furniture,  those were not required in the tender (to organise the event). The AG could not find evidence of a pool and another skateboard ramp.


The Kumba Skateboard Park in Kimberley where the Kimberley Diamond Cup Skateboard Championships took place.

Photo: Facebook/Kimberley Diamond Cup

The department allegedly paid for services and goods that were never received.

HRA Trading was also paid even though the building work was unfinished. There were no supporting documents confirming that the goods and services had been provided. In some of the documents it appeared that full payment was made on the same day that the invoice was submitted. It is considered monetary dumping because it was paid in the last month of the fiscal year.

According to the report, there were many problems with the construction. After construction work on the skateboarding park in Kimberley was completed in March 2019, water streamed in after a rainstorm and it was found that the building needed to be rebuilt higher. The sewerage system was faulty. The AG questioned why an office building was needed because department officials did not use it.


The Kimberley Diamond Cup taking place.

Photo: Facebook/Kimberley Diamond Cup

On one of the Friday Night Lights events the mast lights did not work, and it was found that the cables on the skateboard basin had been damaged during construction and that the bowl had to be demolished to repair the cables. The bowl must be rebuilt. With the AG’s visit in July 2019, the bowl was still incomplete.

Construction work totalled millions

The building work and office equipment in Kimberley, as well as construction work at the skate parks in Springbok, Upington, Kuruman and De Aar totalled millions. The invoices for the work in the towns were issued on the same date.

The AG stated that findings in the report would include material misstatements of capital expenditure, as goods and service were not received at year-end, material non-compliance of supply chain management regulations, and goods of a value more than R500 000 were procured without inviting competitive bids, as well as material non-compliance with treasury regulations.

Spokesperson for the department Ali Diteme said two officials were dismissed.

“Whilst ordinarily we do not comment publicly on the relationship between itself and its employees, we deem this matter to be in the public interest. We confirm that the department did initiate consequence management because of the findings of the AG of South Africa. Two officials have been dismissed from the department as a result thereof.

“The tender for the 2022 KDC event was not awarded as none of the bidders was responsive. The tender is already cancelled on the e-tender portal and is going to be readvertised.”