- Once a rising star Moroahae now stands on the brink of ruin
- His reputation in tatters and his business empire apparently crumbling
Staff Reporter
In a devastating blow to Tholo Energy Services CC, the Supreme Court of Appeal of South Africa has dismissed the company’s appeal and ordered it to pay substantial legal costs.
The judgment, delivered earlier this week, marks a significant setback for Tholo Energy Services and its sole member, Thabiso Moroahae, who now faces the potential unravelling of his business empire amid growing controversy and legal battles.
“The appeal is dismissed with costs, including the costs of two counsel,” read the judgment, which now stands as a damning indictment of the company’s practices.
At the center of this legal storm is Moroahae, a Lesotho-based businessman who has found himself entangled in a bitter feud with his former associate, Tumisang Thahanyane.
Thahanyane has been revealing alleged damaging secrets that threaten to bury his former boss and expose the alleged dubious operations within Tholo Empire.
Apart from owning Tholo energy Services registered in South Africa, Moroahae is also a shareholder and the sole director of Tholo Energy Services (Pty) Ltd, a private company incorporated in Lesotho (Tholo Lesotho).
It carries on business in Lesotho and supplies fuel mainly to companies operating in the construction and mining industries.
Tholo Energy Services CC had been appealing against a scathing High Court judgment that laid bare the company’s attempts to defraud the South African Revenue Service (SARS) through unlawful tax refund claims.
The High Court’s ruling, which dismissed the company’s case in its entirety, exposed a web of deceit and financial misconduct that has left Tholo Energy Services with a tarnished reputation and a staggering financial burden.
Presiding High Court Judge Molotsi, in a scathing indictment, had declared that: “The Applicant (Tholo Energy Services) did not comply with the refund requirements.”
The case centered on Tholo Energy Service’s attempts to claim refunds totaling R4,254,924.80, based on spurious grounds.
According to court papers, between April and June 2016, 25 consignments of fuel of approximately 40,000 litres each, were collected on behalf of Tholo Energy Services from depots of the Petroleum Oil and Gas Corporation of South Africa (SOC) Ltd (PetroSA), for delivery to Lesotho.
PetroSA is a licensee of a customs and excise manufacturing warehouse (a refinery) in Mossel Bay, also known and referred to in the papers as a ‘VM’.
Tholo Energy Services alleged that it had purchased the fuel from PetroSA and that payment was made by Tholo Lesotho. SARS disputed this.
It contended that Tholo Lesotho sourced the fuel it supplied to its customers from South Africa, but used Tholo Energy Services’ particulars and credentials in its transactions with its South African suppliers and when dealing with SARS.
Tholo Energy Services denied this contention and stated that it had acted in its own name and capacity as a licensed distributor of fuel (LDF) and licensed remover of goods under the law.
However, it is common ground that the fuel was not obtained from PetroSA’s VM in Mossel Bay. Instead, 22 consignments of fuel were acquired from PetroSA’s storage tanks at its depot in Bloemfontein.
The remaining three consignments were obtained from PetroSA’s depot at Tzaneen (two consignments) and from TotalEnergies at Alrode, Alberton (one consignment).
All 25 consignments of fuel were removed to Lesotho. It is also common ground that on the dates that they were so removed, Tholo Energy Services had not been issued with an export permit; and that PetroSA does not have a VM in Bloemfontein, Tzaneen or Alrode.
On March 17, 2017, Tholo Energy Services submitted the refund claims. SARS requested it to furnish further information. Subsequently, SARS audited the refund claims and assessed whether Tholo Energy Services had complied with its obligations under the laws, and whether it qualified for a refund.
On June 27, 2017, SARS Commissioner sent a letter of intent to Tholo Energy Services in which it was informed that SARS was of the prima facie view that it had not complied with the provisions of the law, nor with the requirements for a refund of duty.
SARS informed Tholo Energy Services that the Commissioner intended to disallow the refund claims and granted it an opportunity to respond to the letter of intent within 21 days, by producing evidence that the fuel was dealt with in compliance with the law.
Tholo Energy Services was specifically requested to furnish proof that the fuel had been purchased from the licensee of a VM and of the actual litres exported; and that it was in possession of an export permit.
On June 30, 2017, Tholo Energy Services responded to the letter of intent. It stated that duty at source had been paid at the VM when the fuel was purchased; that the actual quantities of fuel loaded were reflected on the bills of lading; and that it never applied for a permit because SARS had informed it that permits were not required for export to BLNS countries (Botswana, Lesotho, Namibia, Eswatini) in the common customs area of the Southern African Customs Union.
On July 20, 2017, after considering Tholo Energy Services’ submissions to the letter of intent, the Commissioner made the determination.
The refund claims were disallowed on the grounds that Tholo Energy Services had not complied with the rules.
The company was informed that it was entitled to lodge an internal administrative appeal against the determination.
On July 31, 2017, the company, assisted by its attorneys of record, lodged an internal administrative appeal.
On October 20, 2017, and pursuant to the company’s request, its attorney made oral representations to the appeal committee. Moroahae was present when the representations were made.
On December 5, 2017, the appeal committee asked the company to provide further information and documents. These were furnished on February 1, 2018.
Subsequently, on May 7, 2018, the appeal committee inspected various premises where the fuel had allegedly been manufactured and stored. On December 10, 2018, the appeal committee disallowed the internal appeal, on the basis that the fuel was not obtained from the stocks of the licensee of a VM as required.
On October 8, 2019, Tholo Energy Services delivered a notice of its intention to institute legal proceedings against SARS, as required by s 96(1) of the Act (the s 96 notice).
Subsequently SARS requested the company to furnish additional information and documents to enable it to evaluate the intended litigation. The company provided the information and documents on March 31 and April 30, 2020.
On July 15, 2020, SARS responded. Its response, in summary, was that;
(a) PetroSA obtained the fuel from other oil majors and there was no evidence regarding the origin of the fuel.
(b) The fuel was obtained from unlicensed premises.
(c) Tholo Energy Services did not pay PetroSA for the fuel. Instead, payment was made by Tholo Lesotho.
(d) The export entry had to be supported by the PetroSA invoice and not an invoice issued by the company. The latter invoice did not reflect the correct volume and value of the fuel, which as a result had been incorrectly declared.
(e) The refund claims were not accompanied by the requisite customs declaration form.
(f) The fuel was not removed by a licensed remover of goods in bond.
(g) The fuel was not wholly and directly exported to the purchaser. There were significant discrepancies regarding the amount of fuel loaded according to the bills of lading, and what was declared for export on the export bill of entry and the delivery notes.
(h) Tholo Energy Services was not in possession of an export permit.
Faced with mounting evidence of wrongdoing, Tholo Energy Services turned to the High Court of South Africa, Gauteng Division in Pretoria. However, the court dismissed the company’s case in November 2022, a decision that has now been upheld by the Supreme Court of Appeal.
