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Cape Town - Former South African Revenue Service (SARS) group executive Johann van Loggerenberg has called on KPMG South Africa to “immediately” withdraw the totality of its controversial ‘rogue unit’ report, not just the conclusions and findings.
This is the first time he has publically addressed the report since KPMG SA retracted its conclusions and findings earlier this month, following an internal investigation.
Van Loggerenberg, in a statement from his lawyers Boqwana Burns, said KPMG’s public apologies and statements following its retraction did not suffice.
"(The apologies are) totally inadequate when measured against the immense harm caused to the economy, the country, a key state institution and many innocent individuals, their families and friends – most of whom have had no voice to defend themselves through their ordeal.”
His lawyers wrote that Van Loggerenberg had been "demonstrating" to KPMG SA for almost two years that its report was “profoundly flawed”.
'Nonsensical and replete with errors'
On Friday September 15, the same day KPMG cleared out its South African leadership, it also retracted the findings of what has become known as the 'rogue unit' report it wrote for SARS.
“Given the failure to appropriately apply our own risk management and quality controls, that part of the report which refers to conclusions, recommendations and legal opinions should no longer be relied upon,” KPMG International said in a statement.
Van Loggerenberg, however, said via his lawyers that retracting only the findings of the report fell way short of the “legal, moral and ethical obligations that rest on KPMG SA to correct the wrongs and the process leading up to its publication".
He described the report as “tardy, nonsensical and replete with errors”, adding that it omitted key evidence, was selective in what it reported and recorded opinions as facts
He also argued the report included contradictory and misleading statements, ignored exculpatory evidence and accepted “unsubstantiated allegations” from third parties as the truth,
KPMG SA should disassociate itself with the report in its totality, not just the conclusions, according to Van Loggerenberg. “Our client calls on KPMG to stop delaying this process and do so immediately.”
KPMG SA did not immediately respond to a request for comment on Van Loggerenberg's statement.
KPMG found to be 'unresponsive'
After leaving SARS in early 2015, Van Loggenberg and former SARS spokesperson Adrian Lackay published the book Rogue: The Inside Story of SARS's Elite Crime-busting Unit, in which they argued that no rogue unit ever existed, and they and other colleagues were pushed aside because of their investigations.
Van Loggerenberg’s statement about the report comes a day after Lackay and three colleagues - Ivan Pillay, Peter Richer and Yolisa Pikie – met with Nhlamu Dlomu, the new CEO of KPMG SA, for “preliminary” talks.
Van Loggerenberg said that he had not however met with KPMG, although he had been trying to “meaningfully engage” with KPMG SA and its attorneys since October 2015.
“Our client has found them to be unresponsive and their communiques (when they did bother to reply) to be dismissive, evasive, inadequate and displaying scant regard for the laws and rules of the audit profession and the basic rights of individuals.”
October 2015 is the date that a draft of the 'rogue unit' report was leaked to the Sunday Times, which referred to it at the time as an “explosive KPMG report” that “confirmed” earlier Sunday Times reports that the SARS rogue unite existed and was allegedly involved in unlawful activity.
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