/ 27 September 2018

Sars official struggles to answer why Pillay was purged

A Labour Court judge ordered that Ivan Pillay return to work and Sars was also ordered to pay costs.
Pillay was suspended twice — the first time on December 5 2014 which he challenged and was reinstated, and again on January 21 2015 — as he was instrumental in setting up the “rogue unit”. (David Harrison/MG)

On Thursday, a South African Revenue Service (Sars) head of employment, who has been implicated in purging executives who were linked to the so-called “rogue unit”, struggled to clarify what his role in the saga was to the Nugent commission.

After close to two hours of questioning by evidence leader advocate Carol Steinberg, Luther Lebelo had still not answered the question: “What was the legal basis for suspending former deputy commissioner Ivan Pillay in the first place?”

The inquiry is probing issues of tax administration and governance at the revenue service during the period between April 2014 and March 2018 when suspended commissioner Tom Moyane was the head.

Pillay was suspended twice — the first time on December 5 2014 which he challenged and was reinstated, and again on January 21 2015 — as he was instrumental in setting up the “rogue unit”. The unit was ostensibly an intelligence gathering outfit that allegedly executed high-level investigations including spying on former president Jacob Zuma. Although these allegations have never been proven they lay at the heart of efforts to get rid of key Sars staff after Moyane was appointed, including Pillay.

Members of the unit and former finance minister Pravin Gordhan have continuously said it was not unlawful and audit firm KPMG which compiled a report into the unit withdrew its findings and apologised to the country for the damage it had caused.

Steinberg wanted to understand from Lebelo, why he believed the covert unit was unlawful because, so far, no satisfactory answer had been given to explain this.

Lebelo said they had suspended Pillay based on the strength of a report from advocate Muzi Sikhakhane. This was later ratified by an advisory board led by Judge Frank Kroon who had found prima facie evidence that the unit was unlawful.

When Steinberg asked him if he was aware of the existence of two legal opinions that debunked the Sikhakhane report, stating that the unit was not unlawful, Lebelo said he did not know of those reports.

The first legal opinion was sought by Pillay from within Sars’ legal department before the establishment of the unit, and the other by Moyane from Advocate Wim Trengrove.

Steinberg said Sars ignored a 34-page document that Pillay submitted to Moyane before his suspension explaining why he believed the allegations against him were baseless. Moyane responded to Pillay telling him that he had not read the documents and stopped him from circulating the report to chief officers because it could be read as an attempt to influence them.

In the report, which Steinberg read extracts from, Pillay said Sikhakhane had made three errors in reaching the conclusions about the “code red nature” of the unit.

“The first one is it relied on untested allegations made in the media. The second is it conflated the unit as was contemplated in 2007 and the unit that came to be after it became clear that the [National Intelligence Agency] would no longer host the contemplated unit.

“Third, the panel did not distinguish between discreet investigations and the covert gathering of intelligence which is aimed at national security” read Steinberg.

Steinberg said this was a different prima facie reading of Sikhakhane’s report which was disregarded by Sars.

Again, Lebelo said he was not aware of the report and said before they finalised Pillay’s second suspension he was given six weeks to convince them why he should not be suspended and at the second suspension, the document was not provided.

“I am here to say judge that the process that we followed wasn’t a purge, I was not part of a purge. If there were errors that were made, then there were errors, but it wasn’t a purge” said Lebelo.

“I was the head of labour relations, I had a … head of HR, but the reality is [in my role] I relied upon by my head of HR and Moyane. At the time of making the decisions … we made decisions on the basis of particular facts and particular circumstances and any head of labour relations for any organisation would have made the same decisions”.

“I want to say boldly that if the same facts were presented to me now I would have made the same decisions that I made then” he ended.

However, Steinberg said the haste with which Pillay was suspended, and the lack of basics of fair procedure, raise questions over whether this was a purge.