The South African Supreme Court of Appeal has ruled against the South African Reserve Bank for forcing Mark Shuttleworth to pay R250-million as a 10% exit levy when he move his money out of the country in 1999.
Shuttleworth, a South African born entrepreneur and IT billionaire who travelled to space as a tourist, sold his company for $575-million in 1999. In 2001, he immigrated to the Isle of Man, a British Crown dependency and a tax-efficient jurisdiction.
On his emigration, South Africa’s Exchange Control Regulations (promulgated in terms of the Currency and Exchanges Act 9 of 1933) had the effect of blocking the expatriation of his assets from South Africa. The value of the blocked loan accounts was R4.2-billion.
Shuttleworth paid R250-million to the Reserve Bank under protest to release the blocked assets, but contended that many facets of the current exchange regime were unconstitutional.
Shuttleworth subsequently launched an application in the Pretoria high court seeking repayment of that sum as well as “fairly wide-ranging orders” to the effect that various provisions of South Africa’s exchange control regime were unconstitutional and invalid. This week, the Supreme Court of Appeal ruled in his favour.
“I am happy that the South African Supreme Court of Appeal ruled in my favour,” said Shuttleworth.
“I will put the returned funds of R250m plus interest into a trust, to underwrite constitutional court cases on behalf of those whose circumstances deny them the ability to be heard where the counterparty is the State,” he said.