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UK law firm again defends its probe of top SARS official

Jan 23 2018 18:36
Jan Cronje

Cape Town - The private law firm that was hired to investigate controversial SARS executive Jonas Makwakwa has again hit out at criticism of the work it did. 

London-headquartered law firm Hogan Lovells, which has an office in Johannesburg, has been accused by British politician Peter Hain of being complicit in state capture in South Africa. 

Meanwhile SARS, which employed Hogan Lovells, has said it probed financial transactions that the lawyers deny were part of their investigation.  

Hogan Lovells on Tuesday said that both characterisations of the work it did investigating Makwakwa - by SARS and by Hain - are incorrect. 

Disciplinary hearing

Hogan Lovells was asked to conduct an investigation into Makwakwa, a top SARS executive, in late 2016. 

This after the Financial Intelligence Centre (FIC) flagged suspicious transactions into his bank account and that of his partner, Kelly-Ann Elskie, which allegedly amounted to R1.7m over six years. 

Makwakwa has denied he did anything wrong.

After the law firm submitted its report in June 2017, SARS held an internal disciplinary hearing – based in part on the report - that concluded Makwakwa was not guilty. 

He then returned to SARS in early November, after having been suspended with full pay for about a year.

The Hain connection 

Lord Hain last week said that he had referred the law firm to the UK’s Solicitors Regulation Authority (SRA) for allegedly enabling corruption at SARS.

As Fin24 previously reported, Hain alleged the Hogan Lovells report had failed to include evidence from a separate inquiry by PricewaterhouseCoopers, and another by the Hawks into the suspicious transactions. 

“That meant that Makwakwa has answered to only a fraction of the allegations levelled against him - a serious deviation from Hogan Lovells’ mandate,” Hain told the House of Lords. 

But the law firm hit back at Lord Hain on Tuesday, saying it was never meant to investigate the suspicious financial transactions.

Hogan Lovells’ South Africa chair, Lavery Modise, said in a statement that Hain had “used his parliamentary privilege to spread and perpetuate allegations about me and my firm that are simply untrue”.

“We have never advised and have not been asked to advise on whether Jonas Makwakwa is guilty of any criminal/tax offences and have not exonerated him of any.”

'Look at SARS, not us'

Modise implied that SARS – who had originally asked the firm to investigate Makwakwa - had been creating the impression it had investigated the suspicious financial transactions.  

“SARS issued a press release on October 30 2017 that implied that we had investigated the Financial Intelligence Centre’s allegations and said we had recommended that disciplinary action be taken against Jonas Makwakwa. 

“Only the latter was correct; and we issued our own press release on November 3 2017 that made it clear that we had not been instructed to investigate the FIC allegations,” he said. 

He reiterated that the law firm’s mandate had simply been to identify whether any misconduct had been committed by Makwakwa and Elskie “as employees of SARS”.

Hain had already in his speech in the House of Lords last week replied to similar arguments, saying it appeared the terms of reference of the investigation had been changed. 

He said while they had initially encompassed the suspicious transactions, the terms were later downscaled to deal only with internal work policies. 

And he claimed the law firm had been a “willingly gullible or malevolent accomplice” to what he termed Moyane’s “obfuscation” of what was meant to be investigated. 

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hogan lovells  |  sars  |  jonas makwakwa  |  tom moyane
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