KEY POINTS
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Nonzukiso Security Services faces sentencing after a 13-year legal battle over R18 million VAT fraud, with its bid to retract guilty pleas dismissed by the High Court.
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The case highlights systemic delays in South Africa’s prosecution of financial crimes, which cost the economy over R100 billion annually.
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Legal experts advocate for procedural reforms to expedite white-collar crime cases, citing eroded public trust and low recovery rates of stolen funds.
Thirteen years after its conviction, Cape Town-based Nonzukiso Security Services faces imminent sentencing for 500 counts of VAT fraud and related offenses, following a High Court ruling that dismissed its bid to overturn guilty pleas.
The Cape Town Regional Court found the company guilty in 2012 after it admitted to falsifying tax returns and claiming fraudulent refunds between 2008 and 2011, costing South Africa’s fiscus an estimated R18 million ($1.2 million).
Nonzukiso had sought to retract its guilty plea, alleging coercion by its Legal Aid attorney. However, High Court Judge Mas-udah Pangarker upheld the lower court’s decision, stating, “The applicants confirmed their pleas freely and voluntarily. Their belated claims of undue influence lack substantiation.”
IOL reports that the firm’s prolonged litigation included failed attempts to interdict sentencing and a 2018 review application, which delayed justice for over a decade.
Case exposes systemic delays in South Africa’s white-collar crime prosecutions
Legal experts argue the Nonzukiso saga underscores inefficiencies in prosecuting financial crimes. “Complex fraud cases often take 5–10 years to resolve, eroding public trust and emboldening offenders,” said University of Cape Town law professor Thandiwe Nkosi.
South Africa loses over R100 billion ($6.7 billion) annually to tax evasion and fraud, per National Treasury’s 2024 report, with SARS recovering less than 20% through prosecutions.
Nonzukiso’s defense centered on Section 113 of the Criminal Procedure Act, which allows plea changes post-conviction. However, Judge Pangarker noted the application was premature, emphasizing, “Interfering mid-stream undermines judicial process. Appeals post-sentencing remain available.” The company’s directors, whose identities remain shielded by corporate liability laws, face potential fines up to R10 million ($670,000) and asset forfeiture.
The case parallels the 2023 conviction of Johannesburg-based SecureCorp, fined R15 million ($1 million) for similar VAT fraud. Anti-corruption watchdog Corruption Watch criticized sentencing delays, urging reforms to fast-track economic crimes. “Without swift accountability, fraud becomes a calculated risk,” said spokesperson Karam Jeena.
Sentencing proceedings, set for June 2025, will consider aggravating factors, including the company’s refusal to repay defrauded amounts. State prosecutor Advocate Luyanda Mbeki confirmed SARS would pursue civil recovery separately.
