Zimbabwe gold mafia scandal case 'could collapse SA banks'

A landmark R4.8 billion lawsuit filed by the South African Revenue Service (Sars) against Sasfin Bank could expose financial institutions to "limitless liability" for their clients' misconduct, the bank's lawyer, Wim Trengove, argued in court on Thursday.

Sars took the niche lender to court in 2023 in a test case that seeks to establish whether banks can be held responsible for their customers' tax-related crimes. The revenue authority accuses Sasfin of aiding 19 companies, labelled "delinquent taxpayers," to unlawfully transfer more than R8 billion out of South Africa without paying the required taxes.

"Recognising Sars' claim would expose banks to indeterminate and potentially limitless liability, with drastic knock-on effects for the financial system and national economy," said Trengove.

He argued that banking laws do not make lenders liable for clients' tax evasion, stressing that Sars, as a creditor, could not legally hold Sasfin accountable for its customers' wrongdoing.

The case has its roots in Al Jazeera's 2023 "Gold Mafia" investigation, which revealed that billions of dollars' worth of Zimbabwean gold were being smuggled into South Africa and laundered through a global network of shell companies, fake invoices, and corrupt officials.

The expose alleged that Zimbabwean President Emmerson Mnangagwa's administration used gold smugglers to bypass Western sanctions, with proceeds from illicit trade helping the government access much-needed U.S. dollars.

According to the investigation, the laundering scheme involved wealthy gold dealers, diplomats, and politically connected elites, some of whom have been implicated in similar operations across Africa.

Zimbabwe - where gold accounts for nearly half of export earnings (over US$2 billion annually) — remains a critical hub in these smuggling routes. By exchanging unaccounted foreign cash for gold, criminal networks and complicit officials have been able to "clean" dirty money through legitimate sales, with proceeds transferred to offshore accounts.

The Sasfin case now stands as a precedent-setting battle that could redefine how South African banks are held accountable for facilitating illicit cross-border transactions — and how regulators respond to the growing intersection between financial crime and regional corruption networks.