SOUTH African Revenue Services commissioner Tom Moyane is taking audit firm KPMG head on for its investigation of the ‘rogue’ unit report and has called on government not to do business with the company.
His remarks follow KPMG’s statement admitting the report was flawed and that the company would refund SARS over R20 million and donate a further R40 million to charities. The audit firm released a statement last week retracting the findings of its investigation but Moyane holds a different view on the investigation.
During a press briefing on Monday, Moyane said he did not agree with the company that the report was flawed.
“We stand by the reports in front of management that there was a prima facie evidence that a rouge unit did exist in Sars before I disbanded it. The report by KPMG is not flawed, in fact, that report confirms that there was wrongdoing at Sars and people were involved in matters besides that of tax collection. We don’t find the report flawed, in fact, it gave us goosebumps,” he said.
The decision by KPMG to go public on its decision to withdraw the findings did not sit well with Moyane and the leadership echelons of the revenue services. He said they would be taking legal steps against the audit firm. He further indicated that the matter had already been escalated to finance minister Malusi Gigaba to take action against KPMG.
He said by going public with their decision to withdraw the findings, KPMG was trying to paint the leadership in a bad light. Moyane added that the company had no right to do that as the report was now the sole property of SARS.
“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. This abhorrent, unethical, and unprofessional conduct by KPMG has left SARS with no option but to consider instituting legal proceedings against KPMG for reputational damage to SARS including but not limited to a civil claim. Report KPMG to the relevant statutory audit bodies both locally and internationally and report KPMG to the Minister of Finance with the aim to blacklist KPMG for it’s unethical, immoral, unlawful and illegal behaviour,” he said.
Moyane added that the finance minister should consider stopping all work currently performed by KPMG in other departments as well as any work in the pipeline until all the work KPMG conducted for the state has been investigated and reviewed for quality and proper auditing quality and expected standards.
He said they would immediately stop any work which KPMG is currently performing for SARS and would assess the company’s previous work for the organisation for a period of 10 years.
He also used the briefing to debunk the myth that ‘rogue unit’ report was used to purge workers. Adrian Lackay, Johann van Loggerenberg and Ivan Pillay were seen as the casualties of the report and said to have been fired in what many perceived as a witch-hunt. Moyane maintained that was not the case.
“SARS has observed with astonishment some former SARS employees and others who have been crisscrossing different media platforms while making unfounded and baseless conclusions as a result of KPMG’s media statement. SARS wishes to categorically state that the allegations that KPMG report was used as the basis for disciplinary actions, as well as the institution of a criminal offence, are at best false and at worse deceitful, and aimed at misleading the people of SA. During the period August 2014, the then Acting Commissioner for SARS, Mr Ivan Pillay Commissioned an Investigation led by Adv Sikhakhane SC with the mandate to investigate allegations that SARS ran a ‘Rogue Unit’. The information was reported by the media then, in particular, Sunday Times and City Press newspapers. The claims were amongst others that SARS had a Unit which was not only established illegally but which was illegally intercepting taxpayer’s information and movements,” he said.
Sars said the commission found that there was an existence of a rogue unit. Chief amongst others, the recommendations was that indeed SARS ran an unlawful rogue unit, led by and reporting to Pillay as well as some insidious and gross misconduct committed by both Mr Pete Richer and Mr Loggenberg, he said.