MASERU — Prominent businessman Osman Moosa was last Thursday convicted on 51 counts of fraud and tax evasion.
Moosa, who is also the chairman of the Private Sector Foundation of Lesotho, was convicted together with his son, Shameen Moosa and their company Selkol 1983 (Pty) Ltd.
Selkol is a member of Moosa’s Group of Companies that includes Building World (Pty) Ltd, Moosa Holdings (Pty) Ltd, Moosa’s Bargain and City Moosa Cash & Carry.
Apart from a stake in Frasers, a retail chain in Lesotho, Moosa also owns a number of properties in Maseru.
High Court judge, Justice ’Maseforo Mahase, sentenced Osman to six years imprisonment or a fine of M500 000.
Osman was also sentenced to a further six years which was suspended for five years on condition that he is not convicted of any crime involving taxation or contravention of the Prevention of Corruption and Economic Offences Act.
Another condition for the suspension of Osman’s sentence is that he should fully disclose “in writing to the Lesotho Revenue Authority within 60 days of all vendors or customers of Accused 1 (Selkol 1983 Pty Ltd) forming the subject of the changes in the indictment relevant to the sales in terms of the loan ledger or account or otherwise and all details of such participation”.
“If called upon to do so he shall consult with the Lesotho Revenue Authority and/or the prosecuting authority and testify to such statement,” Justice Mahase said in her judgment.
She however said “it is understood that (Osman) may not be able to state how the vendors or customers in turn treated or accounted for such transactions in their tax or business affairs.”
Shameen was sentenced to three years but was given an option to pay a M100 000 fine.
He was convicted of 90 counts of tax evasion.
Selkol 1983 has been ordered to pay a fine of M1.5 million for 57 counts of fraud.
The company will also pay M4 million in taxes it owes LRA.
Moosa, Selkol and Shameen were facing a total of 316 charges related to fraud and tax evasion.
Their conviction follows a plea bargaining between Moosa’s lawyer SC Guido Penzhorn and the crown counsel, SC Barry Roux.
Justice Mahase ordered that Selkol 1983 (Pty) Ltd should break the M4 million payment to the LRA in four instalments of M1 million each.
She ordered that by November 30 this year the first instalment should be paid while the second M1 million should reach the LRA by December 31.
The third and fourth instalments will be paid on January 31 and February 28 next year respectively.
“Accused 2 (Osman) is liable jointly and severally with Accused 1 (Selkol) to pay the amount of M4 million to the Lesotho Revenue Authority,” Justice Mahase said.
“This payment is premised on the tax liability in terms of the indictment and is in partial settlement of any tax liability owing and payable to the Lesotho Revenue Authority,” she said.
The Moosas first appeared before the magistrate’s court in November last year.
Their case was later transferred to the High Court.
The indictment filed in the High Court shows that Osman and Shameen operated two sets of accounts to avoid paying tax.
According to court papers the Moosas, who are directors of Selkol (Pty) Ltd which makes furniture and supplies major retail shops countrywide, operated two sets of accounts they used to dodge tax between 1997 and 2006.
The crown however centered its charges on the period between 2003 and 2006.
The Moosas were charged for failing to disclose Selkol’s sales amounting to M10.9 million.
They are also said to have overstated Selkol’s purchases by M5.2 million and in the process failed to pay M1.6 million in tax.
The crown said they failed to declare M1.2 million of Selkol’s sales for the period between April and June of 2003.
The crown also said Selkol was supposed to have paid 10 percent of sales tax to the LRA as well as income tax at 15 percent but the directors did not declare the correct sales figures.
From July 2003 to August 2006 the two did not disclose the company’s M9.7 million worth of sales out of which M1.3 million was supposed to be VAT.
Osman has been the Selkol director since 1983 while Shameen joined him on the board in 2000.
This means that when Shameen joined the Selkol board the company had been operating two sets of accounts for three years.
One set of accounts was on an accounting software programme called UltiSales which was kept in a directory ledger called POS, according to the indictment.
The POS ledger contained Selkol’s sales as part of its business in Lesotho from which the company earned gross profit and taxable income.
The gross income from the sales captured on the POS ledger was shown in the income tax returns of the company to the LRA for tax assessment periods between 1997 and 2006, court papers said.
Things seemed well until the LRA investigators raided Osman’s home and discovered the second set of accounts.
This set of accounts was captured on a memory stick and saved on a Selkol computer server in a directory called NAOL.
Further investigations revealed NAOL was a code name for LOAN and the directory contained Selkol’s sales that were not captured in the POS ledger.
“These sales were not disclosed in the income tax returns, sales tax returns and Value Added Tax returns,” reads the indictment that nailed Moosa.
Investigators also found Selkol’s receipt book at Osman’s home which showed the company’s sales for the period of November 2005 to April 2007.
The two directors were accused of manipulating the amount of stock purchased by Selkol in the financial records in order to reduce the amount of income tax payable.
“These manipulations occurred for the periods 2005 to 2007 and 2009,” the indictment said.
It was the NAOL memory stick and the receipt book that revealed that the Moosas had not declared the company’s sales worth M10.9 million.
“The accused well knew in truth and in fact that the information contained in the returns did not constitute a true and full disclosure of the information required to be disclosed”.
“The LRA was not placed in a position to properly consider and assess the true tax liability of Accused 1 (Selkol).”
LRA spokesperson Pheello Mphana welcomed the judgment saying the case was an indication of LRA’s success.
— Sunday Express2011-08-25