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Pravin Gordhan sucked into Sars saga

May 03 2015 15:51
Abram Mashego, City Press

Minister faces a battle on two fronts as Sars wants him to testify in ‘spy unit’ case and municipalities rebel

Cooperative Governance Minister Pravin Gordhan will receive a letter this week summoning him to testify at the disciplinary hearing of suspended SA Revenue Service (Sars) deputy commissioner Ivan Pillay.

A senior source within Sars told City Press this week that if Gordhan declined to appear before the disciplinary panel headed by former chief justice Sandile Ngcobo, then Sars would simply assume he approved of the formation of the tax collector’s allegedly illegal “rogue spy unit”.

The senior source said Sars’ lawyers would write to Gordhan on Tuesday, “demanding a response” to a letter they sent him in March in which they asked him to testify.

Two other senior Sars sources familiar with the matter told City Press the tax collector’s lawyers had been battling to get Gordhan to testify against his former deputy commissioner.

The first time Sars wrote to him was on March 6. The source said Gordhan responded six days later, asking for details on the matters about which he would be expected to testify.

“On March 16, Sars lawyers responded to Gordhan, saying they had evidence implicating him in the approval of the rogue unit,” he said.

“They also wrote that they had evidence implicating him in the irregular extension of Pillay’s contract. Sars deems this as amounting to fruitless and wasteful expenditure.”

Gordhan did not respond to that letter.

On Tuesday, the source added, Sars’ lawyers would send him another letter, warning him that should he not appear before the hearing later this month, they will deem their findings in regard to Gordhan’s approval of the rogue unit, as well as his role in the extension of Pillay’s contract, as “factual and unchallenged”.

Contacted for comment, Gordhan’s spokesperson, Dumisa Jele, could neither confirm nor deny the correspondence between Sars and the minister.

“Minister Gordhan will study the statements that have been issued or made. We will comment further in due course,” Jele said.

A former senior Sars employee told City Press Gordhan had not yet confirmed whether he would appear before the disciplinary inquiry.

The source said they believed Gordhan to be responsible for irregularly extending Pillay’s contract. Gordhan, he said, authorised Pillay’s early retirement in October 2010, but then extended it for another five years. Pillay’s contract was again extended last year.

A firm date for Pillay’s disciplinary hearing has not yet been set because nine further charges were added to his disciplinary charge sheet this week.

A charge sheet served on him in early February details 10 charges against him, including corruption, dishonesty and contravening the Sars code of conduct, the Tax Act and the Public Finance Management Act.

In the charge sheet, he is accused of “elevating Sars staff costs with over R106 million” and of paying R3 million in severance pay to a former head of the so-called rogue spy unit, Andries Janse van Rensburg, to secure his silence.

A senior Sars source confirmed nine more charges were added this week, but Pillay had not yet been informed of them.

The determination to drag Gordhan into the Sars mess is an indication of how high the stakes are in this battle.

Gordhan’s almost iconic status in South African politics was derived from his leading role in the ANC’s Operation Vula, in which he worked closely with Pillay.

Gordhan is also revered for building Sars into a world-class institution, his respected stint as finance minister and his reputation for unimpeachable integrity.

He is also widely seen as being close to President Jacob Zuma, even during the time when the latter was in the political wilderness.

These new developments come as Gordhan faces a sustained rebellion from councillors and municipalities because of his efforts to fix the country’s local government system.

Gordhan has not yet received any overt support from his political bosses and party in the face of firm resistance to his unpopular local government measures.

The drama at Sars concerns the officially named high-risk investigation unit – the “rogue spy unit” – led by former Sars executive Johann van Loggerenberg. He reported to Pillay and strategic planning risk group executive Peter Richer, who is also facing a disciplinary hearing overseen by Judge Ngcobo.

This week, the advisory panel headed by Judge Franklin Kroon that was appointed by the finance ministry to investigate allegations that a rogue spy unit was operating at Sars released a statement saying that the unit was “secret” and “unlawful”, and the money spent on it “constituted wasteful and fruitless expenditure”.

The Kroon panel also recommended that individuals in management who “erred in the unlawful establishment of the unit” be disciplined speedily.

“To the extent that crimes may have been committed pursuant to the establishment of the unit, the [panel] recommends that Sars report the matter to the [police] with the request that the necessary investigation be accorded priority and any persons who may have contravened the law [be] speedily brought to book,” it said.

However, former Sars employees have slammed the panel, saying it did not call key players to testify before it or conduct its own investigation.

“They just rubber-stamped the Sikhakhane report,” said a former official, referring to a previous report by Advocate Muzi Sikhakhane, who was tasked with investigating the rogue unit’s existence.

Also this week, Sars is set to lay criminal charges against its former spokesperson, Adrian Lackay, who has been given until tomorrow to apologise to his former employers for writing a letter to Parliament’s portfolio committee on finance saying Sars commissioner Tom Moyane had instructed him to issue media statements that were false and that there was nothing “rogue” or irregular about the “spy unit” which he had personally briefed several media houses about as far back as 2010.

Lackay declined to comment.

Sars spokesperson Luther Lebelo said they did not comment on employer or employee issues in the media.

“All we are prepared to say is that the disciplinary [process], as per Sars’ code of conduct, is continuing against Pillay,” he said

pravin gordhan  |  adrian lackay  |  ivan pillay  |  sars
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