How Bain and Moyane 'strategised' to seize SARS

Retired judge Robert Nugent's damning report on the South African Revenue Service (SARS) has outlined how axed commissioner Tom Moyane and top international consulting firm Bain & Co "strategised" to seize SARS, "each in pursuit of their own interests".

The 200 page final report was handed over to President Cyril Ramaphosa on Friday and is scathing of both Moyane and Bain's local unit's restructuring process at the revenue agency. The report also says that Bain's former head in SA, Vittorio Massone's evidence amounted to perjury for lying under oath and that there could be a case for fraud.

The Nugent commission of inquiry, which was appointed in May to probe governance and administration at the revenue agency, could however not find evidence that the parent company was complicit but said this does not absolve it of responsibility.

“We think what occurred can fairly be described as a premeditated offensive against SARS, strategised by the local office of Bain & Company Inc ... for Mr Moyane to seize SARS, each in pursuit of their own interests that were symbiotic, but not altogether the same,” the report reads.

The Nugent Commission states that Moyane’s interest was to take control of SARS while Bain’s interest was to make money. The consulting firm is one of the top international advisory companies. 


Massone resigned in September and Bain & Co committed to set aside all of the R164m of SARS fees plus interest from its work with the revenue service. 

“Indeed, the evidence of Mr Massone, both the evidence he gave before us, and his evidence in a subsequent affidavit, is littered with perjury, both in what he said and in what he didn’t say,” the commission wrote.   

He testified at the commission in Pretoria but when he was summoned again, he was said to have fallen ill and had returned to Italy.

‘Devastating’ restructuring  

At the heart of the commission's concern was the restructuring process at SARS undertaken by Bain in 2014, after Moyane had been appointed the commissioner. 

The report said many employees who testified were “puzzled at why it was thought necessary to fix what was not broken”.

“The effect was devastating for many employees who were displaced, and proved to be detrimental to the efficiency and governance of SARS,” the commission found.  

The commission blamed Bain for the restructuring process, which saw 200 senior staff members shifted without explanation, the Large Business Centre shut and the fragmentation of the ability to collect revenue. 

The Bain restructuring process coincided with SARS experiencing a widening tax collection gap, forcing Treasury to borrow further to fund the deficit.

Moyane blamed this on the country’s weak economic growth.   

‘Sham’ tender process 

According to the commission, Massone’s affidavit reveals that SARS was one of the first "targets" in a campaign by Bain to get access to business in the public sector. Massone met many times with former president Jacob Zuma, and seven times with Moyane, before it bid for the contract, according to his affidavit. 

“Bain had planned in advance for the restructuring of SARS even before it had set foot in the organisation. And it reveals that the Minister of Finance, and the Bid Evaluation Committee and Bid Adjudication Committee of SARS, were misled by non-disclosure, which could amount to fraud," the commission states. 

The commission also found that the closed tender process for the contract was a “sham”. “Bain got its foot in the door by foregoing R2.38m of its ordinary rates in competitive bidding, only to secure phase 2 at its ordinary rates less 12% without competitive bidding, which earned it a further R164 million for phase 2.

Progression to phase 3 would have earned it about R50 million more.

The commission recommended that the National Director of Public Prosecutions should consider prosecutions in connection with the award of the Bain contracts. 

Ramaphosa sacked Moyane on November 1, following a recommendation in the commission's interim report. Moyane lost a high court bid this week to challenge his dismissal and plans to appeal the ruling in the Constitutional Court. 

We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For 14 free days, you can have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today. Thereafter you will be billed R75 per month. You can cancel anytime and if you cancel within 14 days you won't be billed. 
Subscribe to News24
Show Comments ()
Rand - Dollar
Rand - Pound
Rand - Euro
Rand - Aus dollar
Rand - Yen
Brent Crude
Top 40
All Share
Resource 10
Industrial 25
Financial 15
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders