A former KPMG auditor allegedly was so "unprofessional and lazy" that he plagiarised information included in the South African Revenue Service (SARS) "rogue unit" report, the Ntsebeza Commission of Inquiry heard on Wednesday.
KPMG South Africa's head of forensic Roy Waligora told the Ntsebeza inquiry that Johan van der Walt cut and pasted findings and recommendations from a memorandum drafted by law firm Mashiane Moodley and Monama (MMM).
The Ntsebeza Commission of Inquiry was convened by the South African Institute of Chartered Accountants (SAICA) to investigate allegations that some of its members working for KPMG breached their professional code of conduct.
The commission is headed by veteran lawyer Dumisa Ntsebeza.
Waligora said this resulted in the auditing firm failing to appear objective and independent.
In 2014 suspended SARS commissioner Tom Moyane hired KPMG SA to conduct a forensic investigation into an intelligence unit within the revenue service as well as to investigate four SARS officials – Ivan Pillay, Johann van Loggerenberg, Peter Richer and Yolisa Pikie.
However, the report KPMG produced suggested that the unit was breaking the law by using illegal methods and was therefore “rogue in nature”.
Pillay, Van Loggerenberg and Andries Janse van Rensburg are currently facing charges of the illegal interception of communications and corruption relating to the installation of cameras at the offices of the National Prosecuting Authority (NPA), which became known as Project Sunday Evenings.
On Wednesday, Waligora spent the day unpacking details of how the firm dealt with the SARS report and what then led to the retraction of parts of it.
Speaking about Van der Walt's conduct, Waligora said: "I would characterise it as unprofessional and lazy. KPMG regards the conduct as unacceptable."
He said at first he was of the impression that the manner in which the report was done was a misunderstanding, but it later emerged that findings and recommendations were copied and pasted.
He testified that Van der Walt had earlier said that, when he received the memorandum, he agreed with it but that he did not adopt everything.
Waligora said it was unfortunate that at that time no one in the firm reviewed the findings and recommendations.
Meanwhile, a visibly unimpressed Ntsebeza said Van der Walt's conduct was an "act of absolute dishonesty".
"When a professional... cuts and pastes conclusions as if they are their own, that's dishonesty and unethical," Ntsebeza said.
"Did Johan van der Walt act alone when he copied and pasted?" Ntsebeza quizzed Waligora.
Waligora said:"My understanding is that the act was done in his own machine. We don’t have any evidence that suggests others assisted him in the process of copying and pasting."
Retracted parts of report
In September 2017, KPMG retracted parts of its report into the SARS "rogue unit", after an investigation by KPMG International into the South African unit.
"KPMG South Africa had no political motivation or intent to mislead. The partner responsible for the report is no longer with the firm," it said in a statement at the time.
The firm said the evidence in the documentation provided to them did not support this interpretation.
It also said it recognised and regretted the impact this has had.
On Wednesday, the inquiry asked why the entire report was not retracted.
"We have withdrawn the conclusions and recommendations on the basis set out in the statements. The body of the document we have not withdrawn on the grounds that it is our work product....we acknowledge that it is not a perfect document... we think it is a reflection of the facts found in the investigations," Waligora said.
He said KPMG decided to pay SARS R23m based on "flaws" in handling the recommendations and findings.
* This article was updated at 12:55 on Thursday 28 June.
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