SARS inquiry gets off to cracking start with Gordhan evidence

Former SARS commissioner and current Minister of Public Enterprises Pravin Gordhan got the commission of inquiry into SARS off to a bombshell start on Tuesday – explaining how he was shut out of the institution by now suspended commissioner Tom Moyane.

Gordhan painted a detailed picture of the growth of SARS under his stewardship as commissioner between 1999 and 2009 – how he together with staff and management of the revenue service took it to greater and greater heights – becoming essentially, "one of the best in the world".  

The commission, headed by retired Judge Robert Nugent, was appointed by President Cyril Ramaphosa to look into wide ranging issues of governance at SARS. A detailed terms of reference was Gazetted in May this year. The commission has until September to produce an interim report, with a final report due in November.

Other members of the panel include Professor Michael Katz, Vuyo Kahla and Adv. Mabongi Masilo.

While Gordhan’s evidence was initially supposed to be limited to the years he spent at the helm of SARS, questions did arise surrounding his reappointment as finance minister following the axing of Nhlanhla Nene from the position in December 2015.

Gordhan told the inquiry that he was re-appointed on 13 December, and by the 15th he and then deputy finance minister Mcebisi Jonas were at SARS to meet now suspended commissioner Tom Moyane.

One of the issues raised in the meeting was an extensive restructuring of the operating model that Moyane was driving – at a cost of around R300m.

Gordhan said that he instructed Moyane to stop the process until he could look at what was being done – but no information was provided to him and the instruction was not followed.

“There was a deficit of information, to put it politely,” Gordhan said when asked if he was not advised why this process was undertaken by Moyane.

“The first meeting on 15 December, was to say halt this process, give me information, tell me what is really going on. That didn’t happen. All I was told was that we need to continue. There was no deference to the office of the minister for finance. And quite clearly it was linked to revelations that will come a little later.”

Gordhan was referencing allegations surrounding impropriety and the effects of state capture on SARS as an institution, which the inquiry will deal with as its work proceeds.

Adv. Carol Steinberg then put it to Gordhan that, through her interviews so far, it had emerged that there existed two reasons for the restructuring process of SARS operations under Moyane – this after Gordhan had painted a picture of a tax revenue agency that was functioning at an optimum level at the point of his departure in 2009.

When pushed, Gordhan agreed that the rebuilding and streamlining of SARS that started under him continued under successive commissioners, including Oupa Magashule and acting commissioner Ivan Pillay.

“I have heard two reasons: One is that the modernisation process happened too quickly and people were left behind. The second reason was that the SARS procurement process under your watch took no account of BEE, and there wasn’t sufficient attention placed within the organisation itself on affirmative action,” Steinberg said.

Gordhan said the allegations over a lack of transformation needed to be “rejected with the contempt it deserves”.

“On the left behind phenomenon, it is possible that the odd individual couldn’t cope with the changes that modernisation required…but as far as I know within the organisation you have well organised trade unions and that was never raised as an issue. Secondly, through the HR component no such feedback was provided,” Gordhan responded, adding that “a lot of time, money and effort” was spent on training and assessing SARS staff in this regard.

“On employment equity, the numbers are in the annual reports…the numbers speak for themselves. And being a political activist, the last thing you can accuse people like me…is of not having deference to correcting historical wrongs.”

Gordhan also stated that he checked the procurement figures and 61% to 70% of procurement went to black-owned businesses.

‘My conscience is clear’

The now famous early retirement payout to then deputy commissioner Ivan Pillay also came to the fore – with Steinberg revealing that an affidavit submitted by a former SARS official to the inquiry stated that Gordhan conducted considerable legal consultations before approving the payout.

In 2016, Gordhan, Pillay and Magashule were charged by the NPA with fraud relating to Pillay’s early retirement payout – but the national director of public prosecutions Shaun Abrahams was forced to withdraw the charges when an exculpatory memo authored by former SARS legal head Vlok Symington emerged.

Symington had advised that it would not be unlawful for Gordhan to approve the payout.

The new affidavit revealed that Gordhan sought further consultation with legal advisors at National Treasury and also from senior officials at the Public Service and Administration Department.

The process took three months before Gordhan approved the payout – Pillay was then hired back on a contract basis. Pillay had required the funds for personal reasons, Gordhan said.

“My conscience is clear,” Gordhan stated, adding that he had been informed it was normal practice in the public service.

“The reason it became an issue later is that it suited certain people during the state capture period to now pick off those sorts of issues from within SARS. As we know this was during the time of the famous Sunday Times leaks, which cast all sorts of malicious aspersions on certain individuals.

"At the end of it in 2016 we were charged.  It is strange and I hope you will also look into how is it that Symington’s view on the matter didn’t find its way into the records of those who were investigating the matter and so on, which  clearly indicates malicious intent as far as I am concerned. But my conscience is clear, absolutely,” Gordhan said.

The inquiry is due to continue on Wednesday, with SARS officials Sobantu Ndlangalavu, Vusi Ngqulana, Tshebeletso Seremane and Sunita Manik to give evidence.

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