Humiliated Moyane stands by 'rogue unit' report
Publish date: 19 September 2017
Issue Number: 4309
Diary: Legalbrief Today
Category: Corruption
SARS Commissioner Tom Moyane, humiliated by KPMG’s repudiation of the findings of a report it completed for the revenue agency on the so-called ‘rogue unit’ at the utility and which fingers former Finance Minister Pravin Gordhan, among others, says as far as he is concerned the report still stands, notes Legalbrief. However, he wants action to be taken against KPMG, including ‘black-listing by government', claiming the auditing firm has an agenda. According to a Daily Maverick report, Moyane went on the offensive at a press briefing yesterday after KPMG last week apologised to the country for failing to implement standard quality controls or meet its own standards in a report it was contracted to produce for SARS and that was later used to hound Gordhan and other senior SARS leaders viewed as a threat to President Jacob Zuma and his allies. ‘I want to say the report by KPMG is not flawed. In fact the report by KPMG confirms conclusions (in other reports), deeply so, that there is prima facie (evidence of) wrong-doing in this organisation, that there was people involved in real serious problems that are not tax related,’ said Moyane. He said the KPMG report matched so closely with other investigations he got goose bumps while reading it. Moyane claimed KPMG was trying to discredit SARS and said he stuck by the report’s findings despite KPMG's repudiation that ‘that part of the report which refers to conclusions, recommendations and legal opinions should no longer be relied upon’.
Moyane has been placed in a difficult position by the KPMG about-face. A TimesLIVE report says it’s now all out war for Moyane‚ who has labelled KPMG's behaviour ‘unethical’, and has said that he will do everything in his power to ensure the firm is blacklisted in SA and held legally accountable for the fiasco. Moyane mandated KPMG to conduct the report following reports from the Sikhakhane and Kroon commissions of inquiry into the so-called rogue unit‚ which found there was‚ according to Moyane‚ ‘prima facie evidence of wrongdoing’. He said the Kroon Advisory Board found that the establishment of the secret unit within SARS in 2007‚ which covertly gathered intelligence‚ was unlawful. ‘The board went further to instruct SARS to charge employees involved and open criminal charges against those implicated in this act of crime.’ None of those implicated in inquiries‚ including SARS senior executives Ivan Pillay‚ Johann van Loggrenberg and Pete Richer‚ were ever interviewed by the panels, notes TimesLIVE. Moyane insisted that the report‚ which he said was SARS confidential and ‘exclusive’ property‚ was legally sound. ‘SARS sees KPMG’s conduct as nothing else but a dismal attempt to portray SARS‚ its leadership‚ and in particular SARS Commissioner as incompetent‚ corrupt‚ inefficient and involved in a witch-hunt. This is the same narrative that has been perpetuated for years by some treacherous elements within society and the media,’ he said. Asked who would be conducting the witch-hunt and what their agenda might be‚ Moyane had no explanation. ‘I do not know. There can be many explanations for the word agenda. I am loath to respond to the agenda. I do not know who these people are by particular name.'
The commissioner said SARS would bring a civil claim against KPMG for reputational damage, notes a Business Day report. He also emphasised that disciplinary procedures under way against former SARS officials were not based on the KPMG report as suggested. Rather, they are based on the Sikhakhane Report – the outcome of an internal investigation headed by Advocate Muzi Sikhakhane. This report had found 'prima facie' evidence of an unlawful unit and had recommended the setting up of a judicial commission of inquiry. In what the report describes as a tacit swipe at Gordhan, Moyane said those claiming to be exonerated from possible criminal offences due to the withdrawal of the KPMG report were 'misleading South Africans'.
SARS has been rocked by resignations of several senior executives since Moyane's appointment as commissioner in 2014, notes a Fin24 report. Moyane clashed with Gordhan when he halted a restructuring plan at SARS during his time as Finance Minister. The nation’s revenue shortfall for the first quarter was R13.1bn. It’s part of ‘the whole conspiracy theory of replacing good people with bad to facilitate state capture’, Gordhan is quoted as saying. ‘SARS became a political project and it is now run by people who have no idea how to manage a tax administration system. They don’t know what skills are needed and how to use them.’ Moyane, however, said SARS would report KPMG to Finance Minister Malusi Gigaba ‘to consider stopping all work currently performed by KPMG'. He also said it would report KPMG to Parliament through Scopa and the Standing Committee on Finance ‘to investigate the immoral conduct of KPMG and determine the appropriate action’.
Scopa wants KPMG to appear before Parliament to account for its conduct, notes another Fin24 report. Scopa’s ANC study group whip Mnyamezeli Booi said ‘KPMG must account on its involvement in what appears to be politically motivated immoral and unethical conduct’. Booi said they are concerned about the possible existence of similar actions where other departments and entities are concerned. ‘The withdrawal of some aspects of the SARS so called ‘rogue unit’ report calls into question the integrity of KPMG as an auditing firm entrusted to do business with the state.’ Booi suggested Parliament could review every piece of advice the firm has offered it over the years. And, according to a report in The Times, a source close to Scopa said such a review might include the company’s report into the 783 corruption charges against President Jacob Zuma.
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