Documents revealed in a South African tax case suggest the Bank of Bermuda offered tailor-made advice to a tycoon on how to create a "blind alley" and "stop the South African taxman in his tracks".

The South African Revenue Service (SARS) claims billionaire Dave King, and other entities linked to him, owe more than 2.5 billion rand (approximately $324 million) in tax — a claim he has hotly disputed.

In total Mr. King is facing 322 counts of tax fraud, racketeering and foreign exchange control contraventions and his assets have been frozen, the Mail & Guardian in South Africa reported.

It has taken six years to reach the courtroom, but this week the Pretoria High Court heard a series of memos and e-mails from employees of the Bank of Bermuda which suggest the bank helped Mr. King move the bulk of his money, which was held in a company called Ben Nevis, in order to avoid paying SARS.

Court documents show that on November 15, 2000, Steve Bougourd, who was a senior trust officer at the Bank of Bermuda, wrote to his colleague, Dave Hewitson, saying: "Apparently DK wishes to 'dismantle' current structure and transfer the assets of Ben Nevis into a new company, as the 'tax authorities are chasing him'."

The e-mail is critical for the prosecutors, because it suggests Mr. King restructured his holdings solely to escape the tax man.

Mr. Bougourd added that it was important to keep quiet about Mr. King's role in the transactions: "DK's position as an adviser should be very much an 'off the record relationship'."

Less than a week later a summary of a meeting with King, circulated within the Bank of Bermuda, restates the case: "DK has no tax adviser but is happy there is no problem from his point of view in closing the Ben Nevis company. His intention is just to present a blind alley to any revenue investigation."

Speaking of Mr. King, Mr. Bougourd encouraged his co-workers to think outside the box: "He is heavily encashed, he is taking time out to think his strategy through and hopefully the markets will have stabilised a little by then and therefore offer a calmer selling environment. The key, I think, is that we need to be creative ... this could be significant business for the bank."

Within four months a plan had been formulated. On March 9, 2001, Mr. Bougourd wrote in an e-mail to the bank's Adrian Fairbourn: "[W]e are restructuring Ben Nevis to stop the South African taxman in his tracks. To kill two birds with one stone we are also liquidating all investments, as he wishes to take stock, consolidate his position and think through his strategy going forward."

The transactions involved large sums of money.

"What we are doing is selling all his investments in the name of Ben Nevis, that is, a £10-million portfolio with Barclays Private Bank, and two Royal Skandia portfolios (managed by [Cape Town hedge fund firm] Alpha) amounting to approx £3 million" Mr. Bougourd wrote.

"There is already some £50-million on depo with Barclays Private Bank (he has a long-standing relationship with Sir Anthony Richardson)."

As the assets were sold they were "transferred up" to Mr. King's Glencoe Trust and then into a new holding company, Metlika, "thus making a clean break with Ben Nevis".

"Other assets, namely a property and shares in Murray sports, are being reregistered in the name Metlika — Glencoe Trust is also selling its portfolios with Old Mutual and Capel Cure Sharp, which amounted to £2.5-million", the e-mail continues.

These transactions temporarily concealed approximately 500 million rand, which had previously been held by Ben Nevis, SARS allege.

The transactions took place prior to HSBC's acquisition of the Bank of Bermuda. Yesterday HSCBC denied any knowledge of the services offered to King.

Meanwhile the Bank of Bermuda said yesterday it had "no comment" on a number of questions regarding the case.

The case continues in Pretoria.