Pillay retirement entirely above board - Gordhan

Johannesburg - The early retirement of former deputy SA Revenue Service commissioner Ivan Pillay had been "lawful", "not unusual" and "entirely above board".

This is according to a draft statement Finance Minister Pravin Gordhan has sent to the Hawks in response to the latter's accusation that Gordhan had acted corruptly by granting early retirement to Pillay.

In a letter sent to Gordhan by Major General MS Ledwaba, the Hawks' head of organised crime, on Monday, Gordhan is accused of having breached the Public Finance Management Act and the Prevention of Corrupt Activities Act when he approved, as finance minister, Pillay's early retirement in 2010.

The accusation of corruption relates to Pillay's enjoyment of his "full retirement benefits" despite his early retirement and a penalty of about R1.2m, which the Hawks say Sars paid on behalf of Pillay.

Pillay was 56 at the time of his early retirement.

Merely approving a request

In Ledwaba's letter to Gordhan, the Hawks also demanded the latter's "version" on Pillay's subsequent retention by Sars as deputy commissioner on a contract basis for a period of three years.

But according to Gordhan's statement, dated 23 August (Tuesday), the finance minister merely approved a request that was addressed to him by former Sars commissioner Oupa Magashula.

"The then commissioner of Sars, Mr Oupa Magashula, addressed a memorandum to me on 12 August 2010, seeking my approval for Mr Pillay's early retirement and re-employment on a fixed term contract," reads Gordhan's statement.

"I was told that Mr Pillay sought in this way to gain access to his pension fund to finance the education of his children. I understood that Mr Magashula had established from enquiries made with the Department of Public Service and Administration that the terms of Mr Pillay's early retirement and re-employment were lawful and not unusual," stated Gordhan.

He also stated that he had "approved Mr Magashula's proposal because (he) believed it to be entirely above board and because (he had) thought it appropriate to recognise the invaluable work Mr Pillay had done in the transformation of Sars since 1995."

‘Process followed without fault’

Magashula confirmed that the Government Employees Pension Fund (GEPF) Act makes provision for the early retirement of government employees older than 55.

Magashula explained that as Sars commissioner the normal process required of him to send the request for Pillay's early retirement to the finance minister (Gordhan).

"The process was followed without fault," said Magashula.

He added that as far as he had been involved, the re-appointment of Pillay on a contract basis was done in accordance with the Sars Act.

In such instances, said Magashula, the final approval also needs to be sought from the minister, which in Pillay's case Gordhan then granted.

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