Grovelling Bain pleads for a second chance

Bain & Co. which has urged SA’s financial authorities to overturn a ban that prevents it from doing business with the state has come under considerable fire from a graft-weary nation that has its claws out for state capture rogues scattered around the world. And thanks to SA expat Lord Peter Hain – and others – the once respected Boston-based consultancy has had its reputation shredded. As previously reported in Legalbrief Today, National Treasury last month placed Bain SA on its Database for Restricted Suppliers after a referral by SARS. Treasury imposed the penalty after the Boston-based consultancy was accused of helping government officials degrade the ability of the nation’s revenue service to probe tax evasion. The ban came soon after the UK barred Bain from public contracts for three years because of allegations related to SARS. Both the Zondo Commission and another inquiry headed by retired Judge Robert Nugent recommended that the international firm be investigated by relevant law enforcement authorities.

– Statement

While Bain said it accepts there must be consequences for its mistakes, singling out an individual company based on unproven allegations and without due process is ‘concerning,’ it said in a statement received by Legalbrief. ‘We believe that the decision to restrict Bain SA is fundamentally flawed,’ it said. The company added that it would continue to welcome and encourage any opportunity for us ‘to engage with SARS and National Treasury and discuss a potential path forward’. Fin24 reports that Bain, which has initiated legal action to overturn the UK ban, yesterday said it has been singled out based on ‘unproven allegations and without due process’. ‘Bain SA was not notified that SARS was considering imposing a restriction and was not provided with an opportunity to make representations or provide reasons why the restriction should not be imposed and according to the law, we should have been,’ it said. ‘This was despite the fact the decision was apparently reached almost three weeks before we were notified.’ EWN reports that Bain did not say whether it would take legal action to overturn the ban. It has asked Treasury and SARS to overturn the ban and arrange a meeting to ‘discuss a potential path forward’.

Full Moneyweb report

Full Fin24 report

Full EWN report

In a hard-hitting interview on the Money Show last night, the company's managing partner in SA, Stephen York, said its own investigation found that there was no evidence of fraud or corruption on its part. ‘Let me start by saying we deeply regret the mistakes we made leading up to and including our work at SARS between 2015 and 2017. We've acknowledged those mistakes and we've apologised publicly on multiple occasions now. We also accept that there must be consequences for these mistakes – we're not trying to shy away from that. I also fully recognise and support government's responsibility in holding companies to account for the role that Bain has played in state capture.’ However, York added the rejoinder that Bain cannot accept ‘jurisdiction that singles out one individual company’. It also cannot accept action that is based on what the firm claims are ‘alleged fraud and corrupt practices that have not been proven’.

But Bruce Whitfield was having none of it. He noted that Bain has never made its internally commissioned report available for public scrutiny. When York argued that ‘the actual factual findings have been released and they can be found on our website,’ Whitfield objected: ‘You can’t pick and choose which bits you do (release). Unfortunately, what that does is it creates an impression that you are cherry picking. If you publish the report in its entirety to the extent that it exonerates you, then surely that would clear your name. You don’t know the truth. The damage done in the name of this business is deep and vast.’

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