Entrepreneur Mark Shuttleworth wants the courts to declare the Currency and Exchange Act of 1993 unconstitutional, writes FSP Invest.
He argues that the Act was unconstitutional and that it gave the president unfettered legislative powers, explains BDlive.
According to BDlive, Shuttleworth wants the North Gauteng High Court to set aside a levy of more than R250million he had to pay to get some of his assets out of the country in 2009 and order the Bank to return the money. 'Shuttleworth had assets worth more than R4.27bn in South Africa when he emigrated, but transferred them out of South Africa in 2008 and 2009, each time paying a 10% levy.'
Back then, the Act stipulated that immigrants could only remit up to R8 million of capital offshore upon emigration and the rest of the assets were blocked and could only be released upon paying a 10% exit levy.
Shuttleworth also cites the system as the reason for his emigration to the UK in 2001. His wealth is now split between the UK mainland and tax haven The Isle of Man.
The legal challenge has garnered interests and views from different quarters as it could set a legal precedent for you as a business owner. And that's why you should watch it closely.
Mixed views on Shuttleworth's legal challenge
The SA Reserve Bank (SARB) has said the Shuttleworth's bid could have devastating consequences for the country.
According to Business tech.co.za, Jeremy Gauntlett SC, for the SARB described the legal bid as the 'most radical court order imaginable'.
'If the applicant succeeds in striking down Section Nine of the Currency Act and declaring all orders and rules unconstitutional, there would be no inhibition on removing capital from this country at all.'Section Nine is the heart of the exchange control system and he wants to knock [it] down,' said Gauntlett according to Business tech.co.za.
Meanwhile, BDlive reports that Webber Wentzel associate Benjamin Cronin, said while there are a number of potential constitutional concerns over provisions in section nine of the Currency and Exchanges Act of 1933, it is difficult to imagine that it is unconstitutional in its entirety.
The application continues before Judge Francis Legodi. The outcome of the case could have a bearing on your business assets and how the current Currency and Exchange Actaffects them.