Shuttleworth wins R250m from Reserve Bank

0

South African-born technology entrepreneur Mark Shuttleworth has won an appeal at the Supreme Court against the South African Reserve Bank that will see the bank pay him more than R250 million (plus interest). In 2009 Shuttleworth moved R2,5 billion from South Africa to the Isle of Man and was hit with a R250m levy from the Reserve Bank.

Shuttleworth contested the levy and took the matter to court in an effort to have the entire South African exchange control system declared unconstitutional. He didn’t manage this, but did get parts of the county’s exchange control regulations declared unconstitutional. Now he plans to use the money the Reserve Bank has to pay him to fund similar battles.

Shuttleworth-1000“I will put the returned funds of R250m plus interest into a trust, to underwrite constitutional court cases on behalf of those who’s circumstances deny them the ability to be heard where the counterparty is the state,” Shuttleworth said in a post on his blog.

“It is more expensive to work across South African borders than almost anywhere else on earth, purely because the framework of exchange controls creates a cartel of banks authorised to act as the agents of the Reserve Bank in currency matters,” Shuttleworth says. “We all pay a very high price for that cartel, and derive no real benefit in currency stability or security for that cost.”

Shuttleworth says exchange controls stifle the economy, make goods more expensive, reduce South Africans’ ability to compete globally and make cross-border remittances from migrant workers unnecessarily expensive, “a shame we should work to address”.

Though Shuttleworth is no doubt thrilled with the ruling, he says there’s more to the case than simply recouping the money. “We are now considering the continuation of the case in the Constitutional Court, to challenge exchange control on constitutional grounds and ensure that the benefits of today’s ruling accrue to all South Africans.”

It’s the existing exchange control regulations that forced Shuttleworth to leave South Africa in the first place.

“This case also has a very strong personal element for me, because it is exchange controls which make it impossible for me to pursue the work I am most interested in from within South Africa and which thus forced me to emigrate years ago. I pursue this case in the hope that the next generation of South Africans who want to build small but global operations will be able to do so without leaving the country. In our modern, connected world, and our modern connected country, that is the right outcome for all South Africans.”

Share.

About Author

Leave A Reply