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Ntsebeza Inquiry gets final SARS 'rogue unit' report from KPMG

Mar 07 2018 20:06
Ntaoleng Lechela and Jan Cronje

Johannesburg – The Ntsebeza Inquiry has received the final version of the so-called SARS "rogue unit" report from KPMG. 

The inquiry, which will continue on Thursday, was launched by the South African Institute of Chartered Accountants (SAICA) to independently investigate allegations that some of its members employed by KPMG may have contravened the institute's code of professional conduct.

It is specifically investigating the work that certain KPMG employees did for Gupta-linked firms from January 2013 onward.

Its chairperson Advocate Dumisa Ntsebeza said in a statement that the inquiry would not pronounce on whether the controversial rogue report was accurate or not.

Its focus, he said, was squarely on whether any SAICA members had violated the institute's internal code of conduct. 

"We received a request for the final SARS report, dubbed the 'rogue' report, from one of the individuals who had come forward as a potential witness," he said. 

He added it took some time from KPMG to furnish the inquiry with the report, as the group had to first obtain permission from SARS before they could pass it on.

Shweshwe Masitenyane of MMMG Attorneys, who has been acting as a spokesperson for the inquiry, told Fin24 on Wednesday that she could not disclose the contents of the "rogue" report.

She said the report would be discussed in the inquiry, but she could not say when. 

However, Masitenyane could confirm that the inquiry has received the full list from KPMG of the employees that were implicated in the submissions that the inquiry received during its first phase. 

Going rogue 

KPMG publicly withdrew the conclusions of the report in September 2017, following an investigation by KPMG International into the group's South African unit.

“We recognise and regret the impact this has had. KPMG South Africa had no political motivation or intent to mislead,” it said. “The partner responsible for the report is no longer with the firm.”

“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.”

The report was authored by KPMG and requested by SARS Commissioner Tom Moyane. It investigated an intelligence unit within the revenue service that had, as News24 previously reported, started to investigate high-profile tax offenders

The report made headlines when a version of it was leaked to the media in late 2015. 

It came to be known as the "rogue unit" report because it stated that now Public Enterprises Minister Pravin Gordhan - when he was SARS commissioner - "ought to have known" of the existence of what it claimed was a "rogue unit" within SARS.

Gordhan has maintained that there never was a "rogue unit".

He said he knew of an investigative unit, but this was in no way "rogue".

Rather, it was a well-known investigations unit within the revenue service. 

"The Research and Investigative unit created in the South African Revenue Service was legal," he said last year. "Its activities in detecting and combatting the illicit tobacco trade and other efforts aimed at bringing an end to tax evasion, were within the law."

“KPMG had no basis, except subservience to a malicious SARS management, to malign a number of individuals and facilitate, I repeat, the capture of a vital state institution,” he said. 

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dumisa ntsebeza  |  pravin gordhan  |  kpmg  |  ntsebeza


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