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SARS ‘rogue’ unit report not conclusive

20 February 2015   (0 Comments)
Posted by: Author: Natasha Marrian
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Author: Natasha Marrian (BDlive)

The report of an investigation by Muzi Sikhakhane into a covert unit at the South African Revenue Service (SARS) recommended that the inspector-general of intelligence or a judicial commission conduct further inquiries into the matter.

SARS commissioner Tom Moyane has used the report as the basis for what have been contentious suspensions of senior employees. Allegations that powerful political and business interests are at play have plagued SARS since the suspensions.

Mr Sikhakhane’s report, seen on Wednesday by Business Day, was handed to Mr Moyane in November. Deputy commissioner Ivan Pillay commissioned during his stint as acting head of the tax authority. This followed media reports of a ‘rogue’ spying unit within SARS. The unit was allegedly led by former SARS head of investigations Johann van Loggerenberg.

SARS on Wednesday said it had instituted a forensic investigation into the issues the Sikhakhane report raised.

The report made no findings of wrongdoing nor recommended any action against Mr Pillay or head of strategic planning and risk Peter Richer. For instance, it mentions Mr Richer only once and he was not interviewed during the probe. However, both Mr Pillay and Mr Richer were suspended.

Mr Moyane said in December that he decided to "suspend and cause disciplinary proceedings to be undertaken against those employees who have been implicated in the report".

Judge Annelie Basson of the Labour Court confirmed Mr Sikhakhane, an advocate, had not made any adverse findings against the pair when she ruled that Mr Pillay’s suspension was unlawful. He faces a disciplinary committee on February 26.

The report is highly critical of the main subject of its investigation, Mr van Loggerenberg, who allegedly had inappropriate relationships with subordinates, among other charges.

SARS executive for employment relations Luther Lebelo on Wednesday insisted on Wednesday that the tax authority acted on the findings in the Sikhakhane report. It has also used the findings from an external firm’s forensic report and "that of external counsel" to introduce disciplinary steps against the two officials.

Mr Lebelo said while Mr Pillay was not mentioned in the Sikhakhane report he had "established and/or was directly or indirectly responsible for the running of the unit" until it was disbanded last year. Mr Pillay was, therefore, facing charges stemming from the findings of the other investigations that had been conducted in to the matter, Mr Lebelo said.

The Sunday Times reported last year that the unit had spied on President Jacob Zuma and run a brothel.

The Sikhakhane report added that the unit had printed fake SARS identity cards, bugged and traced vehicles, conducted surveillance of individuals, and its members had disguised themselves as drivers to political figures.

Mr Pillay denied to the panel that SARS had sanctioned such unlawful conduct. In his written response to the report, he says that the panel relied on "untested allegations" from the media and others.

It also did not distinguish between "discreet investigations and the covert gathering of intelligence, which is aimed at national security", Mr Pillay said. The Sikhakhane panel had failed to fulfil its mandate as it reports that prima facie evidence existed with looking at all facts.

It did not assess "the weight and veracity which should be attached to the evidence, and failed to make findings of fact". As a result, "no reliance could or should properly be placed upon its report", Mr Pillay said.

The report found "prima facie evidence" that the unit might have abused its power and resources, and violated SARS’s human resources policy in the the recruitment, funding and practices of the unit.

The report added that there was "prima facie evidence" suggesting that the activities of the unit might have included rogue behaviour with the potential of damaging the reputation of SARS.

Mr van Loggerenberg and SARS parted ways "amicably" earlier this month. The Sikhakhane report had accused him of disclosing confidential information to the media and meeting a lawyer for the tobacco industry, Belinda Walter, alone, which were violations of the SARS code of conduct.

He later had an affair with Ms Walter. The report says that while Ms Walter had publicly dismissed allegations she was a spy as "outlandish and ridiculous", she admitted to the panel that she had been an agent of the State Security Agency but cut formal ties with it in 2012.

A "spy game foisted on (the) agency by the world of organised crime co-mingled with rogue intelligence agents" had harmed SARS’s reputation.

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Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.


The Act requires that a minimum academic and practical requirments be set to register with a controlling body. Click here for the minimum requirements of SAIT.

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