Bain says it has set aside money to pay back SARS

Management consulting firm Bain & Company says it has set money to pay back to the SA Revenue Service for consultancy work it conducted for the agency which has been blamed by senior officials for destabilising the tax authority.

The group continued testifying on Monday morning at the Nugent Commission of Inquiry in Pretoria.

The commission, appointed by President Cyril Ramaphosa, is probing the state of corporate governance and allegations of misconduct at SARS. It is separate from the Judicial Commission of Inquiry into allegations of State Capture, chaired by Deputy Chief Justice Raymond Zondo. 

Bain was paid a total of R164m for assisting SARS in redesigning its operating model, a restructuring ordered by now suspended commissioner Tom Moyane. President Cyril Ramaphosa suspended Moyane in March.

The consultancy did not on Tuesday put a rand value on the amount it has set aside to pay back to the SA Revenue Service. The group previously said in a statement its board had "approved to set aside all of the R164m of fees plus interest, from our work with SARS." 

Bain initially said it would await direction from the outcome of the inquiry about when to pay back the money. On Monday morning the inquiry's chairperson, Judge Robert Nugent, pressed Bain Vice President and General Counsel Stuart Min on when the firm would be making the payment, and if there were conditions attached to it. 

Min replied the company was not yet sure how the money should be paid back. “What I know is that money has been set aside [...] the ultimate answer is that it would be paid,” he added. 

The inquiry heard that Vittorio Massone, the managing partner of Bain’s local office, had taken ill and had left the country for Italy. He was set to continue his evidence on Tuesday. 

His absence left a number of questions unanswered, including full details about his meetings with Moyane prior to Moyane's appointment as commissioner in 2014.

Nugent said he was unhappy with the written submission Massone had made about the meeting, saying he had only addressed the matter in two lines.

Massone mentioned part of the reason for his meeting with Moyane was to provide “high level executive coaching” to Moyane. Such meetings are said to have taken place eight times.

Meetings 

Nugent also hit out at Bain for not making a full disclosure before the inquiry commenced about Moyane's meetings with Massone. 

Min, who is based in Boston, in the US, responded by saying the he was not aware of the extent of the meetings.

Moyane's first meeting with Bain was in October, 2013 where a "profound strategy reform" and a new transformation agenda at SARS was discussed, according to an affidavit read by the commission's evidence leader Carol Steinberg.

Under the Bain restructure, which was adopted in 2014, several key revenue collection units were shut down and skilled auditors and investigators were moved or left the company.

The management firm has previously said it suspects it may have been used for a political agenda. 

"There is a growing frustration within our firm that we did not recognise the possibility that we may have been used to further a political or personal agenda," it said in a statement in early September. 

* This article was update on Tuesday at 13:05 to reflect that Bain did not on Tuesday put a rand value on the amount it has set aside to pay back to the SA Revenue Service. The group previously said in a statement its board had "approved to set aside all of the R164m of fees plus interest, from our work with SARS." 

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