Muvhango boss's R26m tax fraud case postponed for pre-trial

The tax fraud case against television producer Duma Ndlovu and his co-accused, Maxwell Mloyi, has been postponed to February next year for a formal pretrial hearing.

The two appeared in the Palm Ridge Specialised Commercial Crime Court on Wednesday, where the matter was postponed to February 9, 2027.

According to the Investigating Directorate Against Corruption (IDAC) spokesperson Henry Mamothame, the accused have indicated that they intend to apply for the relaxation of their bail conditions to allow them to travel outside the country.

The application is expected to be heard on December 3.

Mamothame said the state had placed on record that representations submitted by the accused had been rejected by the office of the National Director of Public Prosecutions (NDPP).

The state also informed the court that the panel responsible for reviewing IDAC cases had confirmed that the case was properly authorised and fell within the directorate's mandate.

Ndlovu and Mloyi are facing 12 charges of tax fraud relating to income tax involving Ndlovu's company.

The charges stem from a collaborative investigation by IDAC and the South African Revenue Service (SARS).

The two were arrested on September 30, 2024, alongside a third accused, Rodney Mutsharini, a registered tax practitioner who allegedly assisted Ndlovu with his personal income tax returns. Mloyi, who is described as an unregistered tax practitioner, allegedly assisted Ndlovu with his company's corporate income tax returns.

The arrests followed an investigation into allegations that Ndlovu and the two tax practitioners colluded to misrepresent his personal and company tax affairs, resulting in an estimated R26 million loss to SARS.

The investigation found that Ndlovu's company, Ambrobite (Pty) Ltd, now known as Kanoboya Consulting (Pty) Ltd, had been subcontracted by international consultancy firm Bain and Company to provide strategic and project management services between November 2013 and September 2016.

Bain and Company had been contracted by SARS to provide services before subcontracting Ndlovu's company.

However, investigators allege that Ndlovu and Mloyi misrepresented the company's trading activities when submitting its tax returns to SARS.

The state alleges that the two declared that Ambrobite was dormant and had never traded during the 2013 to 2017 tax periods, despite the company having been subcontracted to provide services and receiving payments.

This allegedly resulted in financial losses to the revenue service.

The broader investigation also uncovered alleged irregularities involving Ndlovu's personal income tax returns.

According to SARS and IDAC, Ndlovu and Mutsharini allegedly misrepresented his personal income tax returns for the 2016, 2017, 2018 and 2019 assessment years.

They also allegedly submitted returns for 2020 and 2022 but failed to submit one for 2021.

At the time of their arrest, the three accused initially faced 18 charges relating to Ndlovu's personal and company income tax, with the alleged financial loss estimated at approximately R26 million.

Following their arrests, Ndlovu was granted R100 000 bail, while Mloyi and Mutsharini were each granted R50 000 bail.

The court also imposed conditions requiring them to report to police stations and seek permission from the court should they wish to travel outside South Africa.

The investigation into the alleged tax fraud followed recommendations by the Nugent Commission of Inquiry into Tax Administration and Governance at SARS.

The commission, chaired by retired judge Robert Nugent, recommended investigations into suspected fraud, corruption and procurement irregularities within the revenue service.

IDAC subsequently authorised an investigation into the awarding of contracts by SARS, leading to the collaboration between the directorate and the revenue service.

The matter will return to court on December 3 for the bail relaxation application before the formal pretrial hearing in February 2027.