Hathurani, the 63-year-old Chief Executive of Africa Cash & Carry, has had a long-running battle with the SA Revenue Service (SARS). The taxman claims his company cheated it of tax for decades, and wants more than R1bn from him.
Seedat quit the FSB suddenly last Friday (20 June) after allegations that he "extorted" R12m from Hathurani to sort out his tax problems. Seedat, a chartered accountant, worked at SARS until 2005.
However, Seedat has broken his silence and admitted through his lawyer, Darryl Ackerman, that while he was paid to work as a "consultant" for Hathurani he did not perform any tax work for the businessman.
Ackerman, on behalf of Seedat, said his client had done no tax work for Hathurani, and was paid nowhere close to R12-million.
Documents show that Seedat was paid R3m by Hathurani in several instalments.
A first sweetener of R250,000 was given to him at the FSB offices last August, followed by another R750,000, which was allegedly delivered in a box to the FSB offices by Mohammed Moosa, a friend of Seedat's who introduced the two men.
Another R500,000 was given to Seedat at the FSB's office in October. Hathurani's son delivered R500,000 more to him at the Turkish mosque in Midrand in November, and the last R1-million was paid to him at the same mosque in November.
It is understood that Seedat signed two statements detailing what he said were "threats" to him by people close to Hathurani.
In one, he allegedly confirmed that he was hired for R3m.
"I was not prepared to, nor did I, give him or Moosa any tax advice. Hathurani asked me to review his tax case with SARS, and I expressly informed him that I would not do so," he said.
"It has been alleged that I extorted Hathurani to the extent of R12m, which I deny."
But an affidavit from Hathurani, obtained by The Star newspaper, tells a different story.
While Hathurani allegedly confirmed he met Seedat at Calisto's, he said Seedat threatened to close down his business through a tax audit.
"I was petrified and could not think straight. I panicked and asked him what he wanted," Hathurani's affidavit said. "He explained that I would need to pay them to fix the matter."
Hathurani said he agreed to pay R12m, claiming he was overcome by a sense of hopelessness as he had sufficient problems of his own.
Hathurani's lawyer, Saleem Ebrahim, refused to elaborate on whether his client had done anything wrong. "Suffice to say that all the allegations are vehemently denied and will be properly ventilated in the appropriate forums," he said.
But the revelation that a top executive of the FSB took extra payments from a man in trouble with the tax authorities is likely to put new pressure on the financial regulator.
Dube Tshidi, the FSB's Chief Executive, said the organisation could not comment on matters related to Seedat's personal life.
But he said there was nothing pointing to any wrong-doing"by Seedat in his professional capacity at this stage.
Insiders close to Seedat said that before doing any consulting work for Hathurani, he apparently declared this to the FSB.
Although a damning video was circulating this week in which Seedat is accused of supposedly taking two boxes stuffed with cash at the Turkish mosque, Seedat said those boxes contained court papers.
He admitted taking R1.5m at the mosque from Hathurani's men, but said this was part of his consulting deal.
In February, the relationship between Seedat and Hathurani apparently soured after the businessman suspected he was feeding information to SARS.
Seedat was told that Hathurani "intends dealing" with him. He then allegedly received text messages from Hathurani demanding he repay the R12m, which was supposed to be used to pay officials at SARS.
"I became extremely scared. I had no idea where the figure of R12m came from. I had never received such money from anybody," he said.
Court documents confirm that in 2007 Hathurani agreed to a "settlement deal" in which he would pay R200m in compensation for tax breaches dating back to 1983.
But SARS cancelled the deal, saying Hathurani had not made a full disclosure. Hathurani then accused SARS of having a 'hidden agenda and of 'duplicity.
SARS wrote back to Hathurani, saying it had "generously given [you] a conducive atmosphere to regularise your past tax non-compliance".
Hathurani was then ordered to pay R580.2m in back taxes an amount which has since ballooned after a tax inquiry.
Source: Business Times via I-Net Bridge
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