In a more than R46m tax legal battle, the SA Revenue Service (Sars) has filed an application in the Pretoria high court for the attachment of assets belonging to former Prasa CEO Lucky Montana.
The application by the tax authority, which also requested that the MK MP be declared insolvent, will be heard in the high court on Monday.
Sars wants the court to give it the greenlight for the appointment of a trustee to undertake the sequestration of Montana’s estate and the possession of his assets to recover outstanding tax debt.
“This is an application for sequestration of Mr Montana’s estate in terms of section 9 (1) read with a section of the Insolvency Act. The liquidated claim is R45,516,160 (the outstanding debt) for which Sars obtained a judgment against Montana,” Sars court papers said.
The tax debt against Montana relates to more than a decade of troubles with the tax authority.
Should Montana be declared insolvent, it threatens his job as the law states an unrehabilitated insolvent person cannot hold public office.
In 2020, Montana’s tax debt was R1.8m, stemming from a 2015 tax assessment he confirmed to owing then. He was the CEO of the Passenger Rail Agency of SA in 2010-15.
Audit findings
Sars, in court papers, said it uncovered the historical debt of R45m after conducting an audit of Montana’s tax affairs from 2009 to 2019. His total debt is now R46,936,959.
The tax authority’s audit findings on Montana detail income and capital gains he did not declare in the 10-year period.
“Montana underdeclared his income, capital gains tax as well as nonemployment related deposits. This resulted in an underdeclaration of his tax. In addition, tax returns were not filed for the 2017 to 2020 years of assessment,” Sars court papers read.
“Sars issued a final demand for outstanding debt in the amount of R44,736,577 on July 11 2022.”
Montana is opposing the application.
Sars in September 2022 was granted warrants of execution to attach Montana’s assets at three of his properties — in Sandton, Mamelodi and Waterkloof, Pretoria.
At the Sandton property, the warrant could not be executed as the sheriff “on arrival found it had been vacated and locked”.
At the Mamelodi property, the sheriff found the movable property was “insufficient and did not make commercial sense”.
The same was found at the Waterkloof property, court papers read.
“The taxpayer’s total outstanding tax debt which is due or payable is R46,963,959. Sars therefore has a liquidated claim against Mr Montana’s estate and it complies with the requirements of section 9 (1) of the Insolvency Act.”
The Insolvency Act states a creditor may apply to the court for sequestration of a debtor’s estate.
Sars argued that Montana was insolvent because his assets were worth only R10.5m against nearly R47m.
“The result, as Sars sees it, is that Mr Montana’s liabilities exceed his assets by R36.3-odd million. The above is calculated by taking Sars’ debt into account. Sars is not aware which other creditors Mr Montana may have.”
Sars believes the sequestration of Montana’s estate will be to creditors’ advantage.
“A duly appointed trustee armed with the investigative and recovery mechanisms provided for in the Insolvency Act will be in a better position than Sars to investigate Mr Montana’s affairs.
“This in turn will facilitate the discovery of assets and or monies which Montana has failed and/or refused to divulge to Sars.”
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