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5 key takeaways from Bain's statement on SARS

Dec 18 2018 19:29
Sibongile Khumalo

Global management consultancy Bain & Company – hired by former SARS commissioner Tom Moyane to conduct a business model restructure for SARS, at a R164m fee – has told its side of the story about the controversial contract.

In a lengthy statement, issued after the Nugent Commission of Inquiry into tax administration at SARS released its final report on Friday, the firm outlined what went wrong with their involvement at the tax agency, including the relationship it had established with Moyane prior to the awarding of the contract.

In 2015, Bain was granted a contract to review the organisational structure of the tax service. Critics have blamed the structure for hobbling SARS operations, including revenue collection.

Here are five key acknowledgements by Bain.

1. Bain's participation in the procurement 'may have been irregular'

"It is clear from our investigations that Bain’s participation in this procurement process may have been irregular, as the firm had prior knowledge of the Request for Proposal (RFP)," Bain said.

2. Bain should have examined Moyane's 'agenda'

According to Bain, Moyane had a "different agenda" that they should have questioned. "It is also clear that while we started the work in good faith…, by late 2016 we either knew, or should have known, that Mr. Moyane had a different agenda," the statement said.

3. Bain's management was meeting with former president Jacob Zuma

Vittorio Massone, Bain South Africa’s former managing partner, was introduced in August 2012 to then-president Jacob Zuma, and met with him a total of 12 times over the following two years.

4. Bain saw fit to investigate Massone

"After Massone’s initial testimony, it became clear that he was not being fully transparent with the Commission or with Bain, and so we hired global law firm Baker McKenzie to conduct a thorough, independent, forensic investigation," the company said.

5. Due diligence was lacking

"In hindsight, there is evidence to suggest that Mr. Moyane was pursuing a personal political agenda at SARS. Proper due diligence on Mr. Moyane may have identified this risk," Bain said.

The company's involvement at SARS was a "humbling episode", the statement added, with Bain saying it had already returned to SARS all of the fees earned from the contract, including interest.



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