Cape Town – High ranking South African Revenue Service (SARS) official Jonas Makwakwa returned to his post from a suspension while being investigated for tax irregularities by SARS itself, as well as the Hawks.
This was revealed in the Standing Committee on Finance's meeting with SARS commissioner Tom Moyane and the law firm Hogan Lovells on Tuesday.
Makwakwa was suspended, with full pay and benefits, on September 15, 2016, following a report by the Financial Intelligence Centre (FIC) that he allegedly made "unusual and suspicious" deposits into a number of bank accounts between 2010 and 2016, Fin24 reported.
It was also alleged that more than R450 000 was deposited into his girlfriend, Kelly-Ann Elskie’s bank account.
Hogan Lovells was contracted by SARS to "conduct an independent employment investigation" into Makwakwa and Elskie's employment contracts, Lavery Modise, chair of Hogan Lovells told the committee on Tuesday.
The Hawks and SARS were already investigating alleged contraventions of anti-corruption and tax laws. Hogan Lovells said those investigations were still ongoing.
"Hogan Lovells was only to investigate whether Makwakwa and Elskie contravened any internal policies and/ or the PFMA [Public Finance Management Act] when effecting certain payments and whether certain ad hoc payments to Makwakwa by SARS were irregular," said Modise.
Hogan Lovells recommended that disciplinary proceedings be instituted against Makwakwa for not declaring interests, which was done, and according to Moyane, he was "exonerated".
Audit firm PricewaterhouseCoopers (PwC) investigated the source of the funds for each of the transactions and in their report – which was provided to Hogan Lovells - they stated that they could not confirm that the source and nature of the funds for the majority of the transactions were improper.
Committee chair Yunus Carrim wrote to Moyane to request a copy of the PwC report, first on November 15 and again on November 24.
On Monday Moyane responded, refusing to furnish the committee with the report.
He said South African tax law makes it a criminal offence for SARS or any other person to disclose the tax affairs of any taxpayer.
During the question session, during which Moyane and his team sometimes responded sharply to MPs, he often repeated this sentiment.
ANC MP Derek Hanekom wanted to know why Makwakwa wasn't suspended given the Hawks' and SARS' investigations.
Group executive for employment relations at SARS Luther Lebelo said he was suspended for the misconduct, not for the allegations investigated by the Hawks and SARS. He said they had legal advice not to suspend him based on those investigations.
"At all times SARS followed all due processes," Lebelo said.
DA MP David Maynier said: "So, we have now established SARS reinstated a top executive being investigated for tax offences by SARS itself."
"Not correct," said Moyane. According to Moyane Makwakwa is a taxpayer.
"But he's not an ordinary taxpayer," Carrim said.
Moyane said they have no proof that Makwakwa committed tax offences.
"We're discussing a taxpayer. I can't discuss a taxpayer."
The law Moyane invoked here is the same law with which they threatened investigative journalist Jacques Pauw after his exposé in The President's Keepers alleged that President Jacob Zuma received monthly payments of R1m from Roy Moodley in 2009 when he already was President, without declaring it to SARS.
Moyane also reacted angrily when DA MP Alf Lees waved the FIC report as he mentioned it during the meeting, saying it was a public document.
"Once it lands in the public domain, I won't be party to any discussion of that," he said. "I find it very strange that it is in the public domain."
After some toing and froing among the MPs, the committee's legal adviser said he sent it to the MPs after he found it on the Daily Maverick's website for their information, and not to base any recommendations on.
The committee will deal with this matter again in January.
* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER