The South African Revenue Service led a large-scale government search and seizure operation against several alleged members of coal smuggling syndicates across the country on Thursday, including former Eskom employees. “The alleged coal-smugglers and their related entities are active and have a presence in Gauteng, Mpumalanga, KwaZulu-Natal, the Free State and Limpopo,” the tax authority said in a statement. “The suspects targeted today include former Eskom employees who facilitated procurement fraud, as well as other individuals involved in the diversion of high-grade coal.” Sars said it established that the suspects had contravened several tax laws, including non-registration for income tax, failure to submit tax returns, under-declaration of income, claiming undue VAT refunds, and making false submissions. Sars put the loss of revenue to the fiscus by the syndicates at over R500-million. Coal smuggling syndicates have been a consistent problem for Eskom. Often, trucks transporting coal to power stations are diverted to specific coal yards, and high-quality coal is swapped out for low-grade product, scrap or rocks. When the lower-grade products are used at the station, they cause infrastructure damage, rendering them unable to generate electricity, leading to more loadshedding. Sars Commissioner Edward Kieswetter said the raids were a massive breakthrough in ongoing investigations into the syndicates.
