Mr Malema freely states that Mr Mazzotti, CEO of Carnilinx, donated funds that helped register the EFF, and that his wife lived at a property leased from Mr Mazzotti, contrary to media claims that she stayed there for free.
“As an example, I voluntarily stated at the EFF 10th year celebration event... that Mr Mazzotti, who is the CEO of Carnilinx, donated funds that helped register the EFF. It is also a matter of public record that my wife used to reside at a property that is in the same complex precinct at Mr Mazzotti, under a lease agreement... I place underlining emphasis under lease agreement... in contrast to other media reports and claims that I stayed there gratuitously.”
Mr Malema stated publicly that Mr Mazzotti, CEO of Carnilinx, donated funds that helped register the EFF, and also clarifies an under-lease agreement involving his wife and a property in the same precinct as Mr Mazzotti's.
“As an example, I voluntarily stated at the EFF 10th year celebration event, which was perhaps the most widely publicised EFF event, that Mr Mazzotti, who is the CEO of Carnilinx, donated funds that helped register the EFF. It is also a matter of public record that my wife used to reside at a property that is in the same complex precinct at Mr Mazzotti, under a lease agreement. I place underlining emphasis under lease agreement...”
General Khan arranged for Mr Pretorius to work for Mr Sayed to conduct raids on Carnilinx competitors in the illegal tobacco industry.
“the chats suggest that General Khan arranged for Mr Pretorius to work for Mr Sayed, where he would conduct raids on the competitors of Carnilinx in the illegal tobacco industry”
Crime Intelligence officer is using police resources to help Carnilinx target a competitor, Protobac, under the guise of law enforcement.
“Crime Intelligence officer whose job is to police illicit tobacco market who is complementing a player in the tobacco market for essentially doing the work of Crime Intelligence in relation to a competitor of his...the Crime Intelligence resources are being used to enable Carnilinx to take out a competitor or to raid a competitor in the name of the law.”
General Khan, responsible for investigating illegal tobacco, agreed with an executive of Carnilinx that brands are being sold below the minimum collectible tax rate, implying tax evasion, and suggested the person raising objections should be 'effed up' and 'stay in his lane'.
“A General in Crime Intelligence whose job it is to investigate the illegal tobacco industry agreeing with the executive of a company whose brands ... are being sold below the minimum collectible tax rate ... that the person raising objections to this state of affairs needs to get effed up and must stay in his lane.”
There are selective law enforcement practices in relation to the illegal tobacco market; illegal tobacco belonging to competitors Protobacco or Gold Leaf is targeted, but tax evasion by Carnilinx is ignored.
“The laws ... are being administered selectively ... enthusiastic raids of illegal tobacco products that belong to competitors, either Protobaco or Gold Leaf. But when the finger is pointed at Carnilinx, there is abusive comments about the person pointing the finger and saying stay in your lane.”
UNATTRIBUTEDDay 133 · 06 Jul 2026Refers to: July to October 2021Location: South Africa
Carnilinx, the chief member of the Free Trade Association of Tobacco (FITAT), had 62% of its brands purchased below MCT, the highest frequency of tax evasion; Afrobearg brands were the second most prevalent at 9% below MCT.
“Brands belonging to Carnilinx, the chief member of the FITA ... were most frequently (62%) found below MCT ... Purchases of brands owned or licensed by Afroberg ... were the second most prevalent, 9% below MCT.”
There is an apparent alliance between General Khan and Carnilinx, through Mr Sayed, with cooperation in raiding competitors' illegal tobacco and resisting Tax Justice South Africa's campaign to crack down on tax evasion in illicit tobacco.
Carnilinx voluntarily submitted a response to the allegations of illegal tobacco trading to assist the Commission in its inquiry.
“Carnilinx accordingly tenders these submissions voluntarily. It does so not to challenge the Commission’s mandate nor to relitigate historical regulatory matters with the South African Revenue Service but to assist the Commission by placing before it a balanced account of the company’s history, regulatory engagement and present position.”
Carnilinx supports the Commission’s constitutional mandate to investigate criminality, corruption and political interference within the criminal justice system.
“Carnilinx supports the Commission's constitutional mandate to investigate criminality, corruption and political interference within the criminal justice system. It has no interest in shielding unlawful conduct by any person or entity and welcomes any lawful process that advances accountability, transparency and the rule of law.”
Carnilinx submits that findings affecting corporate reputation should be based on credible, independent verifiable evidence and distinguish between historical regulatory defaults and present-day unlawful conduct.
“Carnilinx respectfully submits that findings affecting the reputation of any corporate entity should be based upon credible, independent verifiable evidence and should distinguish carefully between historical regulatory defaults, historical conduct voluntarily disclosed pursuant to chapter 16 of the Tax Administration Act, unresolved tax disputes being determined through statutory mechanisms, allegations made by competitors or industry participants, media reports and public commentary, industry-sponsored reports and evidence capable of establishing present-day unlawful conduct.”
Carnilinx is a South African cigarette manufacturer incorporated in May 2011, operating under license issued by SARS, contributing meaningfully to the South African economy through investment, tax payment, and employment.
“Carnilinx is a South African cigarette manufacturer duly incorporated in accordance with the laws of the Republic. Carnilinx was established in May 2011 and has for approximately 15 years operated within one of the most comprehensively regulated industries in South Africa.”
UNATTRIBUTEDDay 132 · 03 Jul 2026Refers to: May 2011 to presentLocation: South Africa
Carnilinx conducts its business within a statutory framework governed by extensive legislative and regulatory requirements administered by SARS.
“The manufacture of tobacco products is governed by an extensive legislative and regulatory framework including licensing requirements, excise controls, customs supervision, record keeping obligations, inspections, audits and enforcement powers administered by SARS. Carnilinx conducts its business within that statutory framework.”
Carnilinx is a member of the Fair-Trade Independent Tobacco Association, representing independent tobacco manufacturers and advocating lawful competition and combatting illicit trade.
“Carnilinx is also a member of the Fair-Trade Independent Tobacco Association, an association representing independent tobacco manufacturers and advocating for lawful competition, effective regulation and meaningful measures to combat illicit trade.”
Carnilinx engaged with SARS in 2014 in a comprehensive disclosure process concerning historical tax matters, seeking to regularise its tax affairs under applicable legislation.
“During 2014 Carnilinx engaged with SARS in a comprehensive disclosure process concerning historical tax matters with the objective of making full disclosure concerning historical tax compliance and seeking to regularise its tax affairs under the applicable tax legislation administered by SARS”
An affidavit by Carnilinx director Adriano Mazzotti related to historical tax compliance was prepared for confidential engagement with SARS, but versions quoted by media have been found inaccurate and possibly taken out of context without Carnilinx's knowledge or authority.
“The affidavit was intended to form part of a confidential engagement between Carnilinx and SARS. At some stage thereafter, information purporting to originate from that affidavit entered the public domain without Carnilinx's knowledge or authority...Carnilinx further notes that the aspects of the media reporting concerning Carnilinx, Mazzotti, and the historical tax affairs have previously been found by the press ombudsman to have been inaccurate.”
Carnilinx continues to operate as a licensed manufacturer under SARS regulatory oversight, subject to inspections, audits, verifications, and assessments, with some findings accepted and others disputed through statutory mechanisms.
“Following its engagement with SARS concerning historical tax matters, Carnilinx continued to operate as a licensed manufacturer under the regulatory oversight of SARS. The company has remained subject to inspections, audits, verifications, and assessments by SARS in the ordinary course. Certain findings have been accepted and the relevant liabilities discharged. Other findings have been disputed through the statutory objection, appeal, and review mechanisms established under the South African tax legislation.”
Carnilinx denies all allegations contained in the affidavit opposed to Nyatlo and submits that portions of the affidavit conflate historical regulatory matters, unresolved tax disputes, media reports, and industry commentary with present-day criminality, which should be carefully distinguished.
“Carnilinx has carefully considered the allegations contained in the affidavit opposed to by Nyatlo. To the extent that those allegations concern Carnilinx, they are denied. Carnilinx respectfully submits that portions of the affidavit appear to conflate historical regulatory matters, unresolved tax disputes, media reports, and industry commentary with evidence of present-day criminality.”
Carnilinx submits that some of the materials relied upon in the Nyatlo affidavit come from industry organizations and market reports prepared by third parties, which frequently reflect commercial interests and policy positions and are not independent regulatory, court, or investigative authorities.
“Carnilinx notes that portions of the Nyatlo affidavit appear to rely upon publications issued by industry organizations and market reports prepared by third parties. Carnilinx respectfully submits that such materials should be approached with appropriate caution. Industry bodies perform an important role in the public debate. However, they are not independent regulators, courts, or investigative authorities. Their publications frequently reflect commercial interests and policy positions.”
Market surveys and retail pricing studies identify pricing trends but do not establish whether excise duty has been paid or if manufacturers have committed tax evasion or other criminal offenses.
“Likewise, retail pricing studies and market surveys may identify pricing trends or market anomalies. They do not establish whether excise duty has been paid in respect of any particular product, nor do they establish whether a manufacturer has committed tax evasion, fraud, smuggling, or any other criminal offense.”
Media reports, publications by representative organizations, and market studies may contribute to public debate but do not constitute primary evidence of criminal conduct; serious findings should rely on reliable, independent, verifiable evidence before the Commission.
“Carnilinx further submits that media reports, publications produced by representative organizations and market studies, are each different forms of material carrying different evidential weight. While such material may contribute to public debate, it does not constitute primary evidence of criminal conduct. Serious findings against any person or corporate entity should be based upon reliable, independently verifiable evidence properly before the Commission.”
The Nyatlo affidavit suggests that Carnilinx improperly utilizes organs of state against competitors, which Carnilinx unequivocally denies, asserting it responsibly reports suspected unlawful conduct to relevant authorities and does not control investigative functions of state organs such as SARS or SAPS.
“The Nyatlo affidavit further suggests that Carnilinx improperly utilizes organs of state against competitors. Carnilinx unequivocally denies those allegations. Like any responsible corporate citizen, Carnilinx has where appropriate reported information concerning suspected unlawful conduct to the relevant authorities. There is nothing improper in providing information to SARS, SAPS, or any other competent authority. Once such information is provided, all investigative and enforcement decisions remain those of the relevant authority acting under its own statutory powers. Carnilinx has never exercised control over the investigative functions of SARS, SAPS, or any other organ of state.”
Carnilinx voluntarily made these submissions to ensure the Commission understands the company's history in its proper statutory, factual, and commercial context and requests that allegations be answered based on evidence relevant to the issues before the Commission, not historical regulatory engagement, unresolved tax disputes, media reporting, industry advocacy, or commercial rivalry.
“Carnilinx has made these submissions voluntarily because it believes that the Commission should have before it the company's own account before reaching conclusions that may affect its reputation and commercial standing. Carnilinx does not seek to minimize its history or avoid scrutiny, nor does it ask the Commission to determine disputes between itself and SARS concerning historical tax matters. Those matters are regulated by legislation and remain subject to the statutory mechanisms provided by South African law. Carnilinx asks only that its history be understood in its proper statutory, factual, and commercial context. ... Carnilinx respectfully submits that those questions should be answered on the basis of evidence relevant to the issues before the Commission and not by inferences drawn solely from historical regulatory engagement, unresolved tax disputes, media reporting, industry advocacy, or commercial rivalry.”
Carnilinx remains willing to cooperate further with the Commission and reserves the right to supplement submissions should additional information become relevant.
“Carnilinx remains willing to cooperate further with the Commission and reserves its right to supplement these submissions should additional information become relevant.”
There are serious allegations against Mr Sayed, a director of Carnilinx, but there have been no proven criminal cases and charges against him; the Commission can rely on these allegations in its inquiry context.
“And it is not just about Carnilinx as an entity, it is about Mr Sayed, who is a director of Carnilinx. So it relates both to findings against Carnilinx of illegal tobacco trading, not based on media reports, and I will go to Mr Mazzotti's own affidavit to bear out that submission. But also, our evidence is based on Mr Mo Sayed's alleged conduct and at no point have we ever said that there are proven criminal cases and charges against Mr Sayed, but there are very serious allegations and in the context of a Commission of Inquiry, we are entitled to rely on that and to consider that in the course of the investigation of the Commission.”
Carnilinx and SARS concluded a settlement agreement in 2020 based on facts different from those in the 2014 Mazzotti affidavit; the affidavit was provided to SARS under subpoena with necessary permissions for use in these proceedings.
“The settlement agreement that was concluded between Carnilinx and SARS was only concluded in 2020. And in fact, I do not propose to go to it in detail, but it is before the Commissioners and I will just take you to the page reference in a moment. The basis upon which that settlement was reached were facts, different facts and admissions, let me not say admissions, different facts that were agreed to by Carnilinx than the 2014 facts in the Mazzotti affidavit. So it extends over a period of time and we have the objectively verifiable evidence before us, because we requested it from SARS under a 10.6 subpoena and it was provided to us with the necessary permissions to be able to use it in these proceedings.”
The affidavit of Mr Mazzotti contains admissions of past customs excise and tax non-compliance, failure to account for cash income, and failure to pay tax, VAT and excise duty, including the illegal Pieterse transaction involving manufacturing cigarettes off the books.
“the affidavit contains admissions by Mr Mazzotti, both personally and as a representative of Carnilinx and these admissions relate to past customs excise and tax non-compliance, failures to account for cash income, and failure to pay tax, VAT and excise duty ... the illegal Pieterse transaction”
There are admissions of improper cash payments to legal advisers made on the belief that SARS officials were being paid off to assist in resolving Carnilinx's problems with SARS.
“admissions of improper cash payments to legal advisers ... cash payments were made on the belief that SARS officials were being paid off and that by making these cash payments to these legal advisers, they would assist in resolving Carnilinx's problems with SARS”
Carnilinx was registered and operated lawfully to date, and made payments due to SARS on time and accurately, except as mentioned in the affidavit.
“Carnilinx was registered and operated lawfully to date ... the company has always made the payments due to SARS on time and accurately, except as mentioned below”
The affidavit details conduct involving evading income tax, excise duties, VAT, and illegal trading related to the Grindling heading, including cash payments to avoid tax and infiltration of SARS.
“they relate to ... evading income tax, excise duties, VAT, illegal trading ... concerns the payment of cash for certain benefits ... also cash payments to avoid tax, infiltration of SARS”
A settlement agreement, dated 6 May 2014, was signed concluding a dispute involving SARS and Carnilinx; the agreement records SARS' position that cigarettes manufactured by Carnilinx were presented as lawfully moved and exported on paper, but there were no documents to prove lawful export, resulting in SARS treating the cigarettes as diverted into South Africa without paying duties and VAT.
“that agreement is, I mean, really what it does in a nutshell is it records SARS' position and view that the cigarettes, that cigarettes manufactured by Carnilinx were presented on paper as having been moved and exported lawfully, but that there were no documents to prove a lawful export, so the effect was that SARS treated the cigarettes as having been diverted into South Africa without customs duties, VAT, etcetera, being paid.”
The amount in dispute raised by SARS against Carnilinx and its directors including Mr Mazzotti, Mr Phillips, and Mr Sayed is about 31.5 million, but the settlement agreement was concluded on a basis of 5 million and some.
“the amount in dispute means the debt raised by SARS against Carnilinx, the company of which Mr Mazzotti, Mr Phillips, and Mr Sayed are directors, so it is against the company as well as Phillips and Mazzotti in their personal capacities. The amount in dispute is about 31.5 million, but the settlement agreement concluded on basis of 5 million and some.”
Mr. Sayed has approval from SAHPRA for Carnilinx to do the deal and for the related products.
“T h e o t h e r p o i n t t h a t w a s m e n t i o n e d b y M r S a y e d i n t h a t v o i c e n o t e w a s t h a t h e h a s g o t a p p r o v a l f o r C a r n i l i n x t o d o t h i s a n d a l s o t h a t h e h a s g o t a p p r o v a l f r o m S A H P R A f o r t h e s e p r o d u c t s”
Voice notes state that distribution will be through Carnilinx, but the CSD number used is that of a different company, BWCS, not Carnilinx.
“Th e v o i c e n o t e s a y s d i s t r i b u t i o n w i l l b e t h r o u g h C a r n i l i n x ... B u t j u s t t o b e c l e a r , t h e C S D n u m b e r t h a t s e e m s t o h a v e b e e n u s e d i s t h e B W C S D n u m b e r , n o t C a r n i l i n x”
Mr Sayed forwarded a media statement prepared by Yusuf Abramjee from Tax Justice South Africa accusing authorities of failure to act on illegal tobacco flooding South Africa and naming Carnilinx as guilty of illicit cigarette trading.
“Mr Sayed forwards a media statement prepared by Yusuf Abramjee for a non-profit called Tax Justice South Africa ... 'Authorities to blame for tsunami of illegal tobacco flooding in South Africa' ... names Carnilinx as guilty of the same conduct”
Yusuf Abramjee posted a survey showing 2% of Carnilinx brands retail below the MCT, and Mr Sayed said 'This Pi is asking for it, bro'; General Khan responded that they can sort it out easily.
“Yusuf Abramjee recording a survey that shows 2% of Carnilinx brands retailed below the MCT ... Mr Sayed says: 'This Pi asking for it, bro.' General Khan's response: 'We can sort it out easily.'”
There is an attitude and hostility towards certain individuals, including journalists, linked to the Carnilinx scandal and related illegal and criminal conduct.
“the Commission's attention is not just because it is linked to Carnilinx and the subject matter we have been discussing and the allegations of illegal and criminal conduct by Carnilinx, but because it is not the only incident in which there is this attitude and hostility towards other individuals, including journalists”