Bank 'hid assets' of former Pakistani prime minist
Bank 'hid assets' of former Pakistani prime minister
April 4, 2003
By Vernon Wessels
Johannesburg - International banking and tax expert Barry Spitz was allegedly instructed by an officer of Henry Ansbacher & Company in London to assist the Ansbacher Group to hide the assets of former Pakistani prime minister Nawaz Sharif in South Africa, according to papers filed in the Pretoria high court.
Sharif was overthrown in a military coup in 1999 and now lives in exile with his family in Saudi Arabia after once dominating the political stage in Pakistan.
Ansbacher was bought by FirstRand in 1993 but became embroiled in controversy after an inquiry ordered by the Irish high court in 1999 found that the group, which operated in the Channel Islands, the Cayman Islands and the Bahamas, was allegedly involved in fraud and tax evasion from the 1970s till 1996.
Ansbacher ran an illegal banking operation in Ireland but FirstRand expects no material effect from the group's past activities despite the possibility of tax claims worth hundreds of millions of rands.
Spitz was hired as a consultant by FirstRand in February 2000 to provide Henry Ansbacher Trust Service (Hats), the bank's international private client banking operations, with tax and ancillary financial advice.
Spitz and his firm, International Law and Tax Institute, are now suing FirstRand for an amount expected to run into hundreds of millions of rands for commission owing to him in terms of the contract entered into between them.
Spitz argued the contract entitled his company to 7.5 percent of gross revenue of Hats.
But Hats has since merged into Ansbacher South Africa, then into Origin and now into RMB Private Bank. Spitz now believes he is entitled to the percentage of that division's gross revenue as actuarially calculated over an undetermined period of time
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FirstRand has contested his allegations that the contract was terminated illegally and has lodged a counter-claim against Spitz.
In order to fight his case, however, Spitz needed documents, which he believed where in the possession of FirstRand.
The documents will shed more light on instructions allegedly given to Spitz from London to get involved in illegal activities as well as allow him to determine whether Hats had reached certain financial targets that would have entitled him to a portion of the division's gross revenue.
FirstRand had refused to hand over the documents on the grounds that it was up to Spitz to prove the banking group had the documents and that these were relevant to the case.
Sean Farrell, the chief financial officer of Ansbacher South Africa, said the documents would be irrelevant but that FirstRand was not in possession or had no knowledge of all the papers demanded by Spitz.
Judge Willem Hartzenberg yesterday ruled that FirstRand supply a better answer to why it would not hand over the documents as well as appointing an officer or officers that could, through a sworn affidavit, shed light on the documents and relevant issues.
Spitz said he was given instructions in May 2000 to hide Sharif's assets. An officer of Henry Ansbacher & Company in London had already set-up a trust in the Channel Islands into which $70 million had been moved and a further trust of $25 million, the papers said.
The company had received "fees of about $900 000 for moving and hiding the funds of the former prime minister of Pakistan", Spitz said.
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