SARS won’t confirm whether KPMG SA paid back R23m for its report on the ‘rogue unit’

The South African Revenue Service (SARS) would neither confirm nor deny that KPMG South Africa has paid back the R23-million it received as payment for its report on the so-called rogue unit.

KPMG SA spokesperson Nqubeko Sibiya told News24 on Saturday that the international auditing firm has paid back the money.

KPMG had in September last year offered to repay SARS the R23-million fee it received for the work performed during its investigation into the “rogue unit”.

“I can confirm that on Monday January 29, KPMG paid SARS R23-million,” he said.

However, acting SARS spokesperson Sicelo Mkosi told News24 that “as far as we know, investigations are still underway in the matter”.

“From where we are seated, SARS has reported KPMG’s unethical conduct to the IRBA (Independent Regulatory Board for Auditors) and other relevant stakeholders. Until those investigations are concluded SARS would not act or accept any deals from KPMG,” he said.

He said SARS was unable “to ascertain the motives of the public pronouncements by KPMG”.

“We are unable to confirm the public pronouncements by KPMG at this stage. As far as we know the matter remains unconcluded as it is still under investigations. SARS will make a statement once there has been a satisfactory conclusion (to the matter),” he said.

Mkosi said they want the investigations into the matter to be completed in a proper manner “where due processes are followed”.

In 2014, SARS Commissioner Tom Moyane hired KPMG SA to conduct a forensic investigation into an intelligence unit within the revenue service that between 2010 and 2014 had started investigating high-profile tax offenders, which included the finances of prominent politicians and politically-connected business people. The report KPMG produced suggested that the unit was breaking the law by using illegal methods and was therefore “rogue in nature”.

It also suggested that Pravin Gordhan, as SARS commissioner at the time, was aware of the unit’s alleged illegal activities.

Then deputy commissioner of SARS Ivan Pillay, head of investigations Johann van Loggerenberg and others were suspended as a result, and criminal charges were eventually also laid against Gordhan.

The report was also instrumental in removing him from his position as minister of finance.

In September last year, Gordhan said he would seek legal advice, after KPMG retracted parts of its report into the SARS “rogue unit”, after an investigation by KPMG International into the South African unit.

KPMG international said its report into the unit – contracted Moyane – was wrong to suggest that Gordhan out to have known of the establishment by SARS of an intelligence unit in contravention of the rule of law that was ‘rogue in nature”.

Also in September, KPMG said in a statement that the evidence in the documentation provided to them did not support this interpretation.

The firm said it recognised and regretted the impact this has had.

“KPMG South Africa had no political motivation or intent to mislead. The partner responsible for the report is no longer with the firm,” it said in a statement.

It is believed Moyane used the KPMG report to purge Pillay and Loggerenberg and force out spokesperson Adrian Lackay.

Moyane told reporters last year that SARS would sue KPMG, amongst other things, for reputational damage caused by the withdrawal of the report.

He said the intellectual property rights of the report KPMG compiled belonged to SARS and the auditing firm, therefore, had no right to withdraw any part of it.

He claimed disciplinary proceedings against Pillay and others linked to the “rogue unit” were not instituted as a result of the KPMG report, but rather the findings of other, internal investigations. KPMG’s work came under the spotlight after it was revealed in #GuptaLeaks emails that their auditors had “overlooked” how R30-million earmarked for a Free State’s dairy project was used to pay for the lavish Gupta wedding at Sun City in 2013. — News24