Shuttleworth loses case against Reserve Bank

The Constitutional Court has found against Internet entrepreneur Mark Shuttleworth in his battle against the South African Reserve Bank. The court ruled that exit charges imposed on capital exported out of South Africa were not inconsistent with the Constitution but served a purpose in regulating ‘conduct by discouraging the export of capital to protect the domestic economy’, notes a BDlive report. In 2009 Shuttleworth applied to the Reserve Bank for permission to transfer capital (about R2.5bn) out of South Africa. The Bank granted him permission to transfer this amount on condition that he paid the exit charge. Shuttleworth challenged the imposition of this charge in the High Court, contending that the exit charge, as well as various legislative and regulatory provisions underpinning the exchange control system, were constitutionally invalid. The court did not find the imposition of the exit charge to be unlawful, but struck down certain provisions of the Currency and Exchanges Act and the Exchange Control Regulations, calling them unconstitutional. The Supreme Court of Appeal held that the exit charge was unlawful and thus ordered the refund of the charge, but overturned the High Court’s decision that certain provisions of the regulations and Act were invalid. At the highest court, the Reserve Bank and the Finance Minister sought to appeal against the order to refund the exit charge. Shuttleworth sought to cross-appeal against the finding that the regulations and certain provisions of the Act were constitutionally valid.

Full BDlive report