The taxman’s investigation into South Africa’s tobacco industry has taken another twist with the suspension of possibly the most experienced customs investigator at the South African Revenue Service (Sars), Kumaran Moodley.
Described by insiders as one of “the last Jedis” at the troubled revenue service, Moodley heads the Tactical Intervention Unit (TIU), which investigates customs and border offences.
The unit was part of the controversial Project Honey Badger investigation into the illicit tobacco industry that has claimed the heads of senior Sars investigators. According to the book Rogue, written by former Sars head of investigations Johann van Loggerenberg and spokesperson Adrian Lackay, the tobacco investigation led to a backlash at the tax agency against the so-called “rogue unit”.
Moodley was the last team member of Honey Badger still left at Sars.
Moodley’s unit was busy with numerous investigations into the tobacco industry and into Mpisi Trading, which is linked to President Jacob Zuma’s family.
The customs cases under Moodley’s control, if adjudicated in Sars’s favour, would have recovered billions of rand for the fiscus in unpaid value added tax and excise duties. With him gone, these cases may be weakened, said those with knowledge of the investigations.
The Daily Maverick reported that Moodley was notified of his suspension after Sars approached the Hawks to obtain an affidavit from a Johannesburg entrepreneur who works as a consultant in the tobacco industry.
The affidavit was filed in Bedfordview on December 8 last year and related to the importing of parts from a tobacco manufacturing machine from Swaziland allegedly without following proper procedure and the placing of a tracker on a vehicle transporting the equipment.
News24 has seen the affidavit and while it implicates the TIU, it does not name Moodley.
News24 has learnt that the Hawks are also investigating Moodley in relation to the industrial espionage scandal which broke last year on Twitter when a series of documents, alleging that British American Tobacco’s security consultant, Forensic Services Security (FSS), were illegally spying on competitors, were dumped on social media.
Loyal and hardworking
While he had no knowledge of Moodley’s suspension and would not comment on the merits thereof, Van Loggerenberg said Moodley had a long track record at SARS for being loyal and hardworking.
“While I am precluded from expressing facts or details of specific cases by law, I can only say that he was an integral part of many of the projects we were engaged in at that time.
“With respect to investigations into the tobacco industry, he and his team were at the forefront of executing inspections, raids, detentions and seizures. I have always considered him and his management team to be foremost experts in the field of combating customs and excise offences in the tobacco industry,” Van Loggerenberg said.
“Mr Moodley and his team have saved the fiscus more money than what I can describe here. The value and volumes of illicit goods seized and lost revenue collected by him and his team over many years cannot be measured.”
Van Loggerenberg said the loss of experienced managers and investigators to the revenue service “cannot and should not be underestimated”. Sars commissioner Tom Moyane said at a media conference on Friday that the outflow of experienced officials from Sars was a myth.
“The knowledge bank, experience, skills and work conducted over many years by any person of such a calibre will, without a doubt, have a negative impact on the capacity and capability of the state to address organised crime. To replace someone with such a profile will take many years and a lot of money,” said Van Loggerenberg.
Moodley’s attorney, Daniel Witz, said his client denied any wrongdoing. Witz said Moodley had been instrumental in a number of significant investigations into customs contraventions and there was always a worry that non-compliant taxpayers would utilise this as an opportunity to challenge the status of their case.
“The work of the tactical interventions unit which Mr Moodley managed has made significant impact into addressing customs non-compliance and this impact may indeed result in Mr Moodley being targeted. However, this is an ongoing investigation and no further comment can be provided at this time,” Witz said.
Sars said they were prohibited from divulging or discussing “details of internal processes and employee information in the public domain as these are confidential matters between the organisation and its employees”.
Curiously, the investigation into Moodley is allegedly driven by Yegan Mundie, the manager of a “new rogue unit” inside Sars formally tasked with investigating the involvement of Sars employees in the tobacco industry.
But according to News24’s sources, the unit is tasked with digging up dirt on Finance Minister Pravin Gordhan and former Sars employees linked to Van Loggerenberg’s “rogue unit”.
News24 revealed last year that Mundie was linked through his wife to underworld figure Jen-Chih “Robert” Huang of Mpisi Trading – a company Moodley was intimately investigating. Mundie’s wife, Diane, was previously employed by Mpisi Trading while Sars was investigating the company. A director from Mpisi was also found to be requesting quotes from panel beaters to fix Mundie’s BMW 3-series in 2013.
Huang used Zuma’s lawyer
Huang has been a business partner of President Jacob Zuma’s nephew, Khulubuse, and has used Zuma’s legal advisor and lawyer, Michael Hulley, to defend him in cases brought against him by Sars.
A consignment of ANC T-shirts was stopped on entry to the country by Moodley’s unit just before the 2014 national election pending the payment of duties and taxes. The ANC spent R118-million on the campaign T-shirts, of which R41-million was customs duty.
Sars, Amabhungane had reported, launched a full-scale investigation into Mpisi in 2013, leading to a R540-million preliminary tax claim against Huang and an interim preservation order freezing all his assets.
Moodley was personally involved in the customs detention of the ANC T-shirts.
When News24 revealed Diane Mundie’s relationship to the Mpisi group, the tax agency said that “upon joining Sars in 2008, Mr Mundie informed his management of his relationship with Mpisi Trading and as such a decision was taken not to expose Mr Mundie to any of the tax affairs of the taxpayer, as per Sars policy”.
Sars said that a vehicle owned by Mpisi collided with a vehicle Diane Mundie was using, and as such they repaired the vehicle.
When asked if the revenue service did not believe there was a conflict of interest having Mpisi-linked Mundie investigate Moodley, Sars responded saying they were not allowed, in terms of Section 69 of the Tax Administration Act, “to discuss or divulge information about the tax affairs of a taxpayer or trader”.
Another potential conflict was the involvement of Mundie in interviewing the tobacco-linked tycoon, whose affidavit was used to suspend Moodley, at the offices of Mpisi Trading in Bedfordview in December.
The businessperson’s attorney Kirun Naik told News24 the reason they met there is because his son-in-law is an attorney who works at Mpisi’s offices. When asked if Mundie had been present, Naik said he was in a meeting and ended the call. News24 has reliably learnt that Mundie was in fact there.
Mpisi director Chetty Vengas denied that the company had any involvement in the investigation or suspension of Moodley.
“We know nothing about that,” Vengas said. “We never dealt with Moodley at all. We always dealt with Sars employees at branch level.”
Vengas also said he had no knowledge of the businessperson being interviewed at Mpisi’s offices and said he had no idea who the man was. – News24