Public Enterprises Minister Pravin Gordhan said on Friday he would be going to court immediately to challenge the Public Protector’s finding that he had acted irregularly when he approved the early retirement, with full benefits, of Ivan Pillay, the former deputy commissioner of the South African Revenue Service (Sars).
Advocate Busisiwe Mkhwebane released her report earlier on Friday, directing President Cyril Ramaphosa to take disciplinary action against Gordhan and for Sars to recover money that was paid as an actuarial shortfall on Pillay’s behalf.
The report related to the approval by Gordhan — who was finance minister at the time — of an early retirement for Pillay and for Sars to cover the cost of the resulting actuarial shortfall. Gordhan further approved a request to then keep Pillay on at Sars, but on a temporary, fixed-term contract.
In a statement on Friday evening, Gordhan’s lawyer Tebogo Malatji said his team and senior counsel had advised Gordhan that “the Public Protector’s findings, are totally wrong both in fact and in law”.
The statement also questioned the “haste and the timing” of the report, saying it showed “a complete disregard for an important constitutional event for our country, the inauguration of the President of the Republic of South Africa” — which is set to take place on Saturday at Loftus Versfeld stadium in Pretoria.
The minister had made a submission to the office of the public protector on Wednesday, Malatji said. The submission lists five different legal experts Gordhan consulted before he had acted, adding that he “took three months taking advice and contemplating Mr Pillay’s request”.
“All the people whom he consulted confirmed that it would be competent, lawful and appropriate for him to approve Mr Pillay’s request. There was not a single dissenting voice,” the submission reads.
However in her report, Mkhwebane rejected Gordhan’s concerns along with those raised by Pillay and former Sars commissioner Oupa Magashula.
Mkhwebane found that Gordhan acted irregularly because the laws under which he acted provided for people who wanted to retire early from public service — yet Pillay had not “in fact and in law” actually retired, she said.
She said the intention was not for him to retire but for him to access his pension. There had also been no break in his employment.
“If there was no retirement from SARS, and no retirement was contemplated, then the approval of the early retirement in the circumstances was not authorised by statute and was therefore irregular,” she said.
She added that even if retirement had been contemplated, this should only be approved if there was “sufficient reason,” something that should be objectively determined.
She was not convinced there was sufficient reason, given what transpired: “At some point Mr Pillay had indicated financial pressures and the need to access his pension fund for his children’s education, then later stated that his health had deteriorated … Yet Minister Gordhan approved the early retirement and with the same stroke of the pen and in the same motivation also approved his retention as Deputy Commissioner”.
She said when these circumstances were considered “together with the fact that Minister Gordhan and Mr Pillay had a longstanding political kinship dating back to the 1970s, it would not be straying from the realm of reasonableness to draw the conclusion that this was simply an elaborate arrangement to retain Mr Pillay on preferential terms.”
However in a letter on behalf of Gordhan prior to her report being released, Malatji said the conclusions Mkhwebane had reached were “mistaken”.
While Mkhwebane had used a dictionary definition for the meaning of “retirement”, if one used the meaning under the Public Service Act, Pillay had indeed retired, he said.
“We attach an affidavit by Mr Kenneth Govender to the Hawks, dated 14 September 2016, in which Minister Gordhan’s understanding of Mr Pillay’s retirement is confirmed. I also enclose the legal opinion by SARS’ own attorneys, MMM attorneys, dated 5 November 2014, in which the lawfulness of the early retirement is confirmed,” said Malatjie.
Pillay said he would also be seeking redress in the courts. In a statement on Friday, his lawyer Bernard Hotz said: “It is well documented that the issue of Mr Pillay’s pension pay-out has been the subject of several processes and investigations that have all found nothing untoward with it at all.”
“The Public Protector has, however, arrived at findings which are entirely at odds with this weighty body of legal opinion”.
Hotz said Pillay “emphatically disagrees” with Mkhwebane’s findings. “He believes that her findings are reviewable inasmuch as they are both factually and legally flawed. He intends to seek recourse in the courts. We are confident he will find justice there”.