COMPANY NEWS IN BRIEF
SARS wins case against US giant Citibank
Citibank South African may need to pay VAT for the costs of seconded employees sent from elsewhere to work at the group's local operations, a court has found. Citibank South African is the local branch of the US-headquartered banking group.
It approached the North Gauteng High Court in Pretoria earlier this year for an order stating that it does not need to pay VAT on costs linked to seconded employees on so-called "expatriate assignments".
While salaries and wages in South Africa are exempt from VAT, this tax must be paid on "imported services".
If Citibank SA showed it was the employer of the seconded employees, it would likely not have to pay VAT. If, on the other hand, the court found that the seconded employees were supplying "imported services," then VAT would have to be levied.
The court heard that the seconded employees are "lent" by Citibank branches in other countries to work for the group in SA. But they remain employees of the Citibank branches of their "home" nations.
Citibank SA does not pay them directly. It does, however, reimburse their salary costs to their "home" branches via internal service agreements.
The bank argued that the seconded employees working in South Africa should be treated as employees under SA law.-Fin24
Unilever agrees to R400m settlement
South Africa's top anti-trust adjudicating body on Monday confirmed a nearly R400 million settlement agreement between Unilever and competition authorities over the alleged market division of margarine.
The order will see the global consumer goods company will pay a R16 million administrative penalty, while making substantial investments in procurement and supplier development that bring the total settlement to just under R400 million. The settlement agreement, in which Unilever does not admit liability, is full and final.
The case in question dates back six years when the Competition Commission, which acts as an investigating and prosecuting body, accused Unilever and Malaysian firm Sime Darby Hudson Knight of dividing markets in the edible fats and oil industry in South Africa between 2004 and 2012.
At the time, the commission said when Unilever sold its refinery business to Sime Darby in 2004, the parties had reached agreements, including that Unilever would not supply industrial customers with its Flora-branded edible oils.
Among other agreements, Sime Darby allegedly agreed not to supply retail customers with its Crispa-branded edible oils. Sime Darby settled the matter with the commission in July 2016.-Fin24
Hundreds of Nissan SA workers to lose jobs
Nissan South Africa is aiming to retrench hundreds of employees as it hasn't yet found a replacement vehicle for its NP200 bakkie, which will stop being produced at its Rosslyn plant in Pretoria next year.
"Nissan South Africa has now entered into a formal consultation phase to restructure the business, which could result in a reduction in the number of employees across the company.
"Nissan South Africa employs roughly 1 600 individuals. We expect around 400 staff to be affected; however, we cannot and should not pre-empt the result of the consultation process."
Nissan confirmed in August that it would halt production of the NP200 in March 2024. The company said in a statement on Monday that an immediate replacement model was initially planned to be built through "an alliance shared platform in Russia".
"However, the geopolitical situation in Russia meant this model was no longer viable due to significantly reduced volumes.
"Until our future plans are confirmed, the business will be operating at reduced production volumes and needs to act responsibly to maintain its long-term competitiveness and be ready to secure future opportunities."-Fin24
Eskom chair resigns amid conflict with Gordhan
Eskom chairperson Mpho Makwana has resigned, Minister of Public Enterprises Pravin Gordhan announced on Monday.
In a short statement, Gordhan said that Makwana would step down at the Eskom AGM scheduled for the end of October. He was appointed only a year ago and is the shortest-serving chairperson of Eskom to date. Non-executive director Mteto Nyati will be appointed chairperson of the board.
Nyati, who previously was a CEO of Altron and of MTN South Africa, stepped down from the board of Nedbank last week due to "increased capacity constraints". An earlier statement referred to Nyati as the new interim chair, but this was subsequently corrected.
While Gordhan did not provide the reason for Makwana's sudden departure, Makwana said in the statement that the matter had been "amicably settled". Said Makwana: “I am grateful for the opportunity afforded me by the government to serve a second term as chairperson of the board of directors of Eskom. I wish Eskom and its people success and thank its committed stewards for their unstinting efforts to revive the utility. I thank the Minister for the positive, amicable manner upon which we conclude my tenure.”
Gordhan said that he wished Makwana well in his endeavours.-Fin24
Citibank South African may need to pay VAT for the costs of seconded employees sent from elsewhere to work at the group's local operations, a court has found. Citibank South African is the local branch of the US-headquartered banking group.
It approached the North Gauteng High Court in Pretoria earlier this year for an order stating that it does not need to pay VAT on costs linked to seconded employees on so-called "expatriate assignments".
While salaries and wages in South Africa are exempt from VAT, this tax must be paid on "imported services".
If Citibank SA showed it was the employer of the seconded employees, it would likely not have to pay VAT. If, on the other hand, the court found that the seconded employees were supplying "imported services," then VAT would have to be levied.
The court heard that the seconded employees are "lent" by Citibank branches in other countries to work for the group in SA. But they remain employees of the Citibank branches of their "home" nations.
Citibank SA does not pay them directly. It does, however, reimburse their salary costs to their "home" branches via internal service agreements.
The bank argued that the seconded employees working in South Africa should be treated as employees under SA law.-Fin24
Unilever agrees to R400m settlement
South Africa's top anti-trust adjudicating body on Monday confirmed a nearly R400 million settlement agreement between Unilever and competition authorities over the alleged market division of margarine.
The order will see the global consumer goods company will pay a R16 million administrative penalty, while making substantial investments in procurement and supplier development that bring the total settlement to just under R400 million. The settlement agreement, in which Unilever does not admit liability, is full and final.
The case in question dates back six years when the Competition Commission, which acts as an investigating and prosecuting body, accused Unilever and Malaysian firm Sime Darby Hudson Knight of dividing markets in the edible fats and oil industry in South Africa between 2004 and 2012.
At the time, the commission said when Unilever sold its refinery business to Sime Darby in 2004, the parties had reached agreements, including that Unilever would not supply industrial customers with its Flora-branded edible oils.
Among other agreements, Sime Darby allegedly agreed not to supply retail customers with its Crispa-branded edible oils. Sime Darby settled the matter with the commission in July 2016.-Fin24
Hundreds of Nissan SA workers to lose jobs
Nissan South Africa is aiming to retrench hundreds of employees as it hasn't yet found a replacement vehicle for its NP200 bakkie, which will stop being produced at its Rosslyn plant in Pretoria next year.
"Nissan South Africa has now entered into a formal consultation phase to restructure the business, which could result in a reduction in the number of employees across the company.
"Nissan South Africa employs roughly 1 600 individuals. We expect around 400 staff to be affected; however, we cannot and should not pre-empt the result of the consultation process."
Nissan confirmed in August that it would halt production of the NP200 in March 2024. The company said in a statement on Monday that an immediate replacement model was initially planned to be built through "an alliance shared platform in Russia".
"However, the geopolitical situation in Russia meant this model was no longer viable due to significantly reduced volumes.
"Until our future plans are confirmed, the business will be operating at reduced production volumes and needs to act responsibly to maintain its long-term competitiveness and be ready to secure future opportunities."-Fin24
Eskom chair resigns amid conflict with Gordhan
Eskom chairperson Mpho Makwana has resigned, Minister of Public Enterprises Pravin Gordhan announced on Monday.
In a short statement, Gordhan said that Makwana would step down at the Eskom AGM scheduled for the end of October. He was appointed only a year ago and is the shortest-serving chairperson of Eskom to date. Non-executive director Mteto Nyati will be appointed chairperson of the board.
Nyati, who previously was a CEO of Altron and of MTN South Africa, stepped down from the board of Nedbank last week due to "increased capacity constraints". An earlier statement referred to Nyati as the new interim chair, but this was subsequently corrected.
While Gordhan did not provide the reason for Makwana's sudden departure, Makwana said in the statement that the matter had been "amicably settled". Said Makwana: “I am grateful for the opportunity afforded me by the government to serve a second term as chairperson of the board of directors of Eskom. I wish Eskom and its people success and thank its committed stewards for their unstinting efforts to revive the utility. I thank the Minister for the positive, amicable manner upon which we conclude my tenure.”
Gordhan said that he wished Makwana well in his endeavours.-Fin24
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