Mark Shuttleworth is livid!
And he’s taking his grievances up with the Pretoria High Court this week in an attempt to order the SA Reserve Bank to return his money.
“Following his emigration, Shuttleworth left substantial assets in South Africa. Over the years, he transferred some of them out of the country. In 2009, Shuttelworth decided to transfer his remaining assets and was told by the Reserve Bank that he could only do that, provided he paid a 10 percent levy,” – which he paid under duress, reports IOL.
Essentially, explains Fin24, “Shuttleworth blames the existing system of exchange control in South Africa for forcing him to emigrate from South Africa in 2001. He says in court papers the system made it impossible to conduct his entrepreneurial and philanthropic ventures.”
But are SA’s exchange controls really unconstitutional?
Well that’s a matter for the judge to decide. But it look like advocate, Gilbert Marcus SC has a strong case
After all, if “Shuttleworth had waited a year, he would not have had to paid the levy as this requirement fell away in 2010,” explains IOL.
That’s why yesterday, Marcus argued “South Africa's exchange control system was governed not by laws but by the dictates of an organ of state that were not accessible to the public. He argued they did not follow any constitutionally required process of promulgation and violated many constitutional rights,” reports Times Live.
He also added that the Reserve Bank’s regulations violated the right to procedurally fair administrative action and the rights to property and free trade.
How much money can you take out of the country according to current exchange controls?
Thanks to legislation that came into effect in December 2011, South African’s can now “transfer up to R1 million per calendar year as part of your single discretionary allowance for investment purposes. This means you can now invest up to R5 million outside SA’s borders every year,” explains the team of experts behind The South African Investor.
And while this may seem like a lot of money to you, for entrepreneurs like Shuttleworth, R5 million is just a drop in the ocean when you’re setting up multi-billion dollar ventures.
It’ll be interesting to see what Judge Francis Legodi rules on this landmark case, which continues in court today.