The South African Revenue Service (Sars) has welcomed a high court judgment about its R5.3 billion damages claim against Sasfin Bank, saying the ruling marks âsignificant progressâ in holding financial institutions accountable for facilitating illicit financial flows.
Sars issued a summons for R5.3 billion against Sasfin in December 2023, alleging the bank assisted taxpayers to illegally export undeclared funds from South Africa.
Sasfin raised legal exceptions to Sarsâs particulars of claim, which were argued in the Gauteng Division of the High Court in Pretoria on 9 October 2025. The judgment was delivered on 3 November.
According to Sars, the court upheld Sasfinâs exceptions âin certain respects and dismissed it in respect of othersâ.
The exception was upheld because the court found that the statutory framework â comprising the Banks Act, the Financial Intelligence Centre Act (Fica) and the Exchange Control Regulations â does not give rise to a private law duty of care owed to Sars or other creditors.
Sars argues that this point turned on legal interpretation rather than insufficient pleading.
As part of its claim, Sars seeks recognition of a novel common-law duty â namely, a duty on authorised dealers not to cause Sars patrimonial harm by directly or indirectly facilitating the unlawful expatriation of undeclared taxable funds.
Sars highlights that the dismissal of Sasfinâs exception on the element of causation and its objection to an alternative claim is a significant development.
Sars says the ruling confirms that it âhas a statutory right of action under section 278 of the Financial Sector Regulation Act (FSRA) for losses suffered due to contraventions of financial sector lawsâ, allowing the alternative claim to proceed to trial.
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Sasfin reacts
Sasfin CEO Michael Sassoon says the group welcomes the findings.
âThe two most significant claims against Sasfin have been found to have no merit.â
He notes that the third potential claim, âwhich is by far the smallest of the threeâ, will be decided by a trial court. âSasfin and its legal team remain confident that it will successfully defend claim three.â
Sassoon reiterates that Sasfin has zero tolerance for financial crime and has taken rigorous action against it where it has been found.
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Next steps
Sars on the other hand says the judgment âaffirms a clear statutory remedy to pursue losses arising from breaches of financial sector laws by banks and other institutionsâ.
Sars Commissioner Edward Kieswetter adds that he has âconsistently reminded financial institutions to go beyond a narrow compliance response when reporting questionable transactions to the Financial Intelligence Centreâ and to properly manage the risks associated with suspicious activity.
Sars will consider its next steps, including amending its pleadings as permitted by the court or applying for leave to appeal aspects of the judgment to the Supreme Court of Appeal.
The revenue authority described the outcome as strengthening efforts to protect the fiscus and the broader public interest.
ALSO READ: Sasfin apologises for âcriminal activityâ in its former forex business
Sasfinâs apology
When filing its annual results in October 2024, Sasfin apologised for the âcriminal activityâ in its former forex business.
Sasfin employees allegedly helped Gold Leaf Tobacco launder money in an intricate web, which the group describes as the âactivities of a criminal syndicate of former clients and staff, working outside of their scope of employment of the now closed-down forex business of Sasfin Bankâ.
Sasfin incurred a R209.7 million administrative sanction from the Prudential Authority for âhistoric compliance failuresâ, of which R49.05 million was suspended.
The lender subsequently exited the forex business and laid criminal charges against implicated staff members.
This article was republished from Moneyweb. Read the original here.
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