Billionaire IT developer, Mark Shuttleworth, has failed in a bid to have South Africa's exchange control regulatory scheme declared unconstitutional by its Supreme Court of Appeal (SCA).
Shuttleworth made his fortune through Thawte Consulting, which produced the first full-security encrypted e-commerce web server available outside the United States. The first African in space, Shuttleworth emigrated from South Africa to the Isle of Man. An exit levy of 10% then in effect was imposed by the Reserve Bank (South Africa's Central Bank) on a transfer of capital funds by Shuttleworth. The measure is no longer in operation.
In dismissing the constitutional challenge by Shuttleworth, the Supreme Court of Appeal upheld in part a cross-appeal by the Reserve Bank of South Africa against a High Court order which held certain provisions in the exchange control regulatory scheme unconstitutional, granting the Reserve Bank the costs of three counsel. It held that "Shuttleworth's primary purpose was not purely altruistic". But it also held that the imposition of the levy was irregular, and ordered its refund to Shuttleworth.
Shuttleworth has since announced that he is to devote the returned funds to advancing constitutional litigation in South Africa – and that he himself will seek leave to appeal the SCA ruling to the Constitutional Court, adding that it cost him more to emigrate than to go into space.
The Reserve Bank, in turn, has announced that it is considering whether to cross-appeal to the Constitutional Court the order setting aside the exit levy on Shuttleworth.
The judgment is here.
Jeremy Gauntlett SC was leading counsel for the Reserve Bank, instructed by Knowles Husain Inc, Johannesburg.