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Media statement on the judgment in the Regiments Capital matter

Media statement on the judgment in the Regiments Capital matter

Tshwane, 19 May 2023 – The Commissioner for the South African Revenue Service (SARS), Mr Edward Kieswetter, said he was pleased to note the decision of the Supreme Court of Appeal on 18 May 2023 in the matter of Commissioner for SARS v Regiments Regiments Capital (Pty) Ltd and Others.

Several parties, with an “interest” in Regiments brought an application to set aside Regiments’ liquidation. SARS intervened and opposed the setting aside of Regiments’ liquidation; however, the High Court made a decision to, inter alia, set aside Regiment’s liquidation.

Inherent in the court proceedings was the authority to unbundle significant share transactions and the protection of the distribution of the proceeds.

SARS and the liquidators appealed this decision to the SCA which has now set aside the High Court’s decision and confirm Regiments’ liquidation.  The effect of this decision now places the winding up of the company, including the unbundling of the company’s investments, in the liquidators’ hands and under the ultimate supervision of the credits and the Master of the High Court.

In overturning the decision of the High Court and upholding SARS’ appeal, the SCA conclusively found that Regiments was both factually and commercially insolvent and that there was no basis for finding that the continuation of its winding-up was unnecessary or undesirable.

These proceedings demonstrate that SARS is attuned to the nuances of corporate structuring and has the skills and the resolve to intervene and act firmly to protect the fiscus and act purposively in the overall interest of the tax base.

Commissioner Kieswetter said: “The outcome of this complex and highly contested appeal reflects my undertaking, given at the start of my term, to act decisively and judiciously to combat instances of state capture and to regain public trust and confidence.”

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