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Bridgestone Firestone Maxiprest Limited - Update to shareholders
Bridgestone Firestone Maxiprest Limited
(Incorporated in the Republic of South Africa)
(Registration number 1988/006456/06)
Share code BDS ISIN ZAE000027447
("the company")
UPDATE TO SHAREHOLDERS
1. Your attention is drawn to the company"s cautionary announcements of 3
April 2003 and 29 May 2003.
2. As previously advised, KPMG was mandated by the directors of the company
to conduct a forensic audit of all transactions which had taken place between
the Bridgestone Firestone Maxiprest Group of Companies and Mr. Grant Ramsay
("Ramsay") and entities associated with him. The mandate also covered payments
made by the company to certain directors through structures set up by Ramsay.
The majority of the transactions under investigation took place between 1990 and
1998, prior to the listing of the company.
3. The company approached the South African Revenue Services ("SARS") when
the forensic audit revealed that certain tax irregularities had in fact occurred
within the company.
4. After extensive negotiations with SARS the board has now managed to
regularise the company"s tax affairs. The board of the company announces the
following in this regard:
4.1 The company acknowledges that certain irregularities occurred in that
companies with assessed tax losses were purchased by Maxiprest Tyres (Pty) Ltd
and utilised to reduce its tax liability. The acquisition of companies with the
assessed tax losses occurred prior to the listing of the company and prior to
the appointment of the current non-executive directors and prior to the
formation of the Bridgestone Firestone Maxiprest Group.
4.2 There is an ongoing investigation into payments made to certain
executive directors who were directors of the company when the tax losses were
utilised. The company acknowledges that payments made to certain of the
directors did not comply with the provisions of the Income Tax Act taking into
account that the directors were provisional taxpayers during that period. The
company has taken all necessary steps to avoid such a situation occurring in the
future.
4.3 The company has taken all the relevant steps to regularise its tax
affairs with SARS.
4.4 The company has undertaken to assist SARS where possible with its
investigations of alleged tax irregularities in respect of payments made to
certain of the past directors.
4.5 The company acknowledges that there are indications that certain of
the executive directors did not comply with their corporate governance
responsibilities and obligations towards SARS during the period covered by the
investigations.
5. The outstanding tax liability of the company has been settled in full on
the basis that a full and frank disclosure has occurred relating to the issues
as set out in 2, 3 and 4.1 above.
6. The company is operating profitably and it is confident that it will
continue to play a leading role in the industry, both in South Africa and sub-
Saharan Africa.
7. The total payment made to SARS in respect of the above issues amounts to
R42 621 751. This amount has been financed by means of facilities provided by
the company"s bankers. In the company"s annual financial statements it will be
reflected as an adjustment to opening retained equity and the 2001 and 2002
results will be restated to give effect to the above. The revised financial
information will be republished once the basis of accounting has been finalised.
Johannesburg
19 June 2003
Sponsor
Brait Sponsors (Proprietary) Limited
(Registration number 2000/031069/07)
Date: 19/06/2003 05:43:04 PM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
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