Durban — The US-based software giant Cloud Software Group, also known as Tibco, has apparently penetrated the South African market using its sister company, Citrix, in spite of continued litigation for its alleged unethical conduct.
To avoid being questioned over tax evasion allegations, the company was said to have stopped trading with its holding company name, Tibco, and was now using its subsidiary, Citrix, to continue doing business with “unsuspecting” organisations.
It was believed it changed its trading name after its main clients, which included Telkom, Nedbank and others, indicated that they were awaiting the outcome of ongoing litigation with TechSoft before they decided if there would be any actions by their organisations.
The company is in several legal disputes with its BEE partner, TechSoft. There are pending court dates for final determination in the alleged unlawful conduct and the cancellation of its distribution contract with TechSoft.
This paper has been reliably informed that the tech giant was also under scrutiny by the SA Tax Revenue (Sars) since August last year and was said to have not responded to Sars by the end of last year. Sars has previously said that in terms of Section 69 (1) of the Tax Administration Act (No 28, 2011), its officials may not disclose taxpayer information to a third party, and this includes possible investigations against a taxpayer.
This paper has reached out once again to Mazars and Thomson Wilkes regarding their involvement with the Cloud Software Group but it had not responded by the time of publication.
Thomson Wilkes was asked to clarify their previous statement, where it said it was not aware of the company’s commercial dealings and was only representing it in the recent litigation.
It has come to light that a Wilkes senior executive has been Cloud Software’s attorney/legal counsel since 2006 and has been involved in all contracts and legal aspects. In the previous communication, the company had referred all queries to this legal firm for a response on its behalf.
Mazars was again questioned as to how it was possible that an audit firm disregarded opinion and tax filings that indicate potential criminal behaviour.
The company is currently involved in a protracted court battle with its BEE partner, TechSoft, over the apparent unlawful cancellation and continued to avoid its BEE obligations. It has resulted in severe job losses and lost taxation to South Africa.
TechSoft Group Corporate Affairs Executive Brian Mpono said his company had learnt that the US company was engaging in several levels and using their financial muscle to destroy his company.
According to the auditing firm KPMG, the company failed to make important disclosures when it had been asked to verify its business operations in South Africa to confirm its tax obligation to Sars. It was suspected of cleverly disguising the movement of its profits out of the country by classifying its expenses as management fees and not as the sale of software.
According to further information obtained, allegations state that the company's financial declaration to Sars did not accurately reflect foreign-related party payments as required by South African authorities.
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