AS IT HAPPENED: Now Gordhan to take legal action over 'biased' Public Protector report

Gordhan's lawyer Tebogo Malatji issued a statement on Gordhan's behalf on Friday afternoon, following the release of the Public Protector's report on an investigation into allegations of the SARS so-called rogue unit.

Minister of Public Enterprises Pravin Gordhan says his legal team will prepare an urgent review of Public Protector Busisiwe Mkhwebane's report into the so-called SARS 'rogue unit' - once they receive it.

Read his full statement below:

"1) Neither the office of Minister Pravin Gordhan, nor anyone in his legal team had received a formal notice, correspondence or report from the Public Protector about alleged findings and remedial actions prior to these being announced by her to the media today, including on YouTube live streaming.

"2) Minister Gordhan has stated unequivocally that he is unreservedly committed to uphold the Constitution and the rule of law. Whilst respecting the Office of the Public Protector – and cooperating with their investigations - Minister Gordhan, like many others, has recorded his serious misgivings about the incumbent, her conduct and her partiality.

"3) From today’s announcement, with respect to Minister Gordhan and his tenure as the former Commissioner for the South African Revenue Service (SARS), it is apparent that the Public Protector continues to get the facts wrong, get the law wrong and is demonstrably biased.

"4) The Constitution, in section 181, envisages the Office of the Public Protector to be independent, impartial, dignified and effective. To date, in this matter, it has failed in all four respects.

"5) We wish to thank the Public Protector for completing her process.

"6) It is now possible for the Public Protector’s investigation, the report and the proposed remedial action to be scrutinized by the courts. Minister Gordhan has instructed his legal representatives to consider the Public Protector’s report, upon its receipt, and to prepare an urgent review.

"7) We will announce the details of the envisaged legal action next week."

Former deputy Sars commissioner Ivan Pillay has slammed Public Protector Busisiwe Mkhwebane's report into the so-called "rogue unit" and Pravin Gordhan.

Read his full statement, written by his legal team, below:

"1) Our client, Ivan Pillay ("Mr Pillay") has noted the content of the media briefing held by the Public Protector on Friday, 5 July 2019. Unfortunately, Mr Pillay did not receive a copy of the report from the Public Protector prior to the aforesaid media briefing.

"2) In relation to that which has been announced by the Public Protector during her media briefing: 2.1 Mr Pillay emphatically denies all of the findings which are factually and legally flawed; 2.2 the findings seem to demonstrate that either no, or at best very little investigations were conducted; and 2.3 some of the findings demonstrate: (i) a complete lack of an understanding of SARS as an institution; (ii) some of the findings are patently false; and (iii) it is apparent that misinformation has been provided to the Public Protector.

"3) Mr Pillay has requested us to publically release his initial affidavit which was submitted to the Public Protector on 23 April 2019 in terms of section 7(4)(a) as well as his further affidavit which was submitted to the Public Protector on 19 June 2019 in terms of section 7(9)(a). 

"4) Once Mr Pillay and his legal representatives have had the opportunity of studying the Public Protector's report, Mr Pillay will institute the appropriate legal proceedings for the protection and enforcement of his rights."

In response to a request for comment on Friday following the release of the report, a spokesperson for SARS said he could not immediately comment and asked for written questions. - Fin24 reporter Lameez Omarjee

Comment:

Public Protector Busisiwe Mkhwebane has delivered a hammer blow to Gordhan, a staunch ally of president Cyril Ramaphosa. She has found merit in long standing and disproved allegations surrounding a unit established at the South African Revenue Service in 2007, later known as the 'rogue unit'.

In legal and political terms, her findings are disastrous for Gordhan, who will no doubt take the matter to court. - Kyle Cowan

BREAKING: Gordhan has not received Mkhwebane's report, and is considering his legal options. 

Gordhan's spokesperson, Adrian Lackay, told News24: "We watched the Public Protector's announcement on Youtube. We have not received a notice, a finding or a report from the Public Protector's office. We are deciding about our strategy which could including an interdict or taking the report on review." 

Gordhan is currently overseas.

Comment: Mkhwebane has revealed that, crucially, she found evidence that the so-called 'rogue unit' procured equipment used to gather covert intelligence. But the actual list of the equipment in the report, is 'blurred' for security reasons. - Kyle Cowan

Mkhwebane denies that she is part of an anti-Ramaphosa faction. She says she is just doing her work without fear or favour.

Comment: This is an exceptionally damaging report for Gordhan. There are multiple findings against him which he will not easily be able to brush aside. - News24 reporter Kyle Cowan

Mkhwebane now responding to more questions from journalists. 

She is asked to explain what activities the rogue unit undertook. 

Mkhwebane says she has evidence that the unit conducted covert intelligence operations that were not related to Sars.

Mkhwebane's speech ended with quotes by Mandela and the Bible. 

“I have cherished the ideal of a democratic and free society in which all persons live together in harmony and with equal opportunities. It is an ideal which I hope to live for and to achieve. But if needs be, it is an ideal for which I am prepared to die.”

She added, 

"The book of Esther, Chapter 4, reads thus: 'And so I will go to the King, which is against the law; and if I perish, I perish!'"

Earlier, Mkhwebane was adamant that the implementation of her findings must go ahead even if the parties want to take her report on review.

"I look forward to the full implementation of remedial action in all these reports. I reiterate that the mere action of instituting review proceedings does not suspend implementation. If anyone wish to both institute review proceedings and suspend the implementation, I advise them to obtain a court interdict staying implementation. It is important that we draw a distinction between an appeal and a review. Failure to do this might amount to acting in a manner that is inconsistent with the Constitution and the law," she said.

Mkhwebane has denied allegations of bias in her investigations, saying that there have been a number of other investigations involving ministers.

Mkhwebane is now taking questions. She denies that she is overreaching in her investigation, and says that judge Robert Nugent's finding that the rogue unit's establishment was lawful is not relevant to her investigation.

And within 60 days, Mkhwebane says there must be a criminal investigation into Gordhan, Pillay and officials involved in the SARS intelligence unit, for violation of section 209 of the Constitution and section 3 of the National Strategic Intelligence Act, including Magashula’s conduct of lying under oath.

Mkhwebane says that within 30 days, the parties must ensure that all intelligence equipment utilised by the SARS intelligence unit is returned, audited and placed into the custodian of the State Security Agency.

Mkhwebane's remedial action:

(i) To take note of the findings in this report in so far as they related to the erstwhile Minister of Finance, Mr Gordhan and to take appropriate disciplinary action against him for his violation of the Constitution and the Executive Ethics Code within 30 days of issuing of this report."

Gordhan's "violation of the Code of Ethical Conduct and Disclosure of Members’ Interests for Assembly and Permanent Council Members" must be referred to Parliament's Joint Committee on Ethics and Members' Interest, she says, within 14 working days.

Mkhwebane says she has evidence in her possession that confirms the existence of intelligence equipment. If Sars' operations were lawful, it is unclear why Sars kept this a secret, she says. Mkhwebane says she can only conclude that this is because they did not follow proper procurement procedures.

On the recruitment allegations - allegations that no recruitment processes were followed is substantiated.

Mkhwebane says Sars, under the guidance of Pillay, established the intelligence unit without involving the State Security Agency. The commissioner of Sars is the accounting officer, she says, and is accountable. She says that under former finance minister Trevor Manuel, Sars had already begun operating the unit and Gordhan should have been aware of this.

Mkhwebane finds that former SARS Commissioner Oupa Magashule lied under oath during his interview with her for saying no such intelligence unit existed.

On the Sars "rogue unit": Mkhwebane finds that the allegation that the unit was established unlawfully is substantiated.

Mkhwebane says Gordhan failed to remember anything that happened during this time and says this is implausible.

On the meeting with Gupta family member, which it is alleged Gordhan did not disclose, Mkhwebane finds the allegation is substantiated.

Mkhwebane: "I need to state clearly, my investigation into the establishment of the unit...should not be viewed as stifling the ability of SARS to curb the illicit economy."

Mkhwebane says she decided to focus the "first part" of her investigation into a few of these allegations: That Gordhan lied to Parliament for not disclosing his meeting with a member of the Gupta family, and allegations that Sars established an unlawful intelligence unit (the so-called "rogue unit") which allegedly obtained illegal equipment to conduct intelligence operations, and the appointment of Ivan Pillay.

It was also alleged that the so-called Sars "Rogue" unit obtained illegal bugging equipment, and bugged the offices of the National Prosecuting Authority. 

Mkhwebane: "I conducted this investigation in terms of the Executive Members Ethics Code."

The complainant made a number of allegations: 

- That the former Commissioner of SARS Ivan Pillay did not follow proper procedures appointing Yolisa Pikie and Johann van Loggerenberg.

- That Van Loggerenberg was paid cash deposits directly into his personal bank account from tax payers under investigation. 

- That Jonas Makwakwa also received irregular cash deposits into his bank account. 

- Allegations surrounding the establishment of an illegal intelligence unit during Pravin Gordhan's tenure as Commissioner.

Mkhwebane now moves into the Gordhan report. She says she has conducted the investigation under extremely difficult circumstances. She says that the treatment she received by 'some of the respondents' is tantamount to contempt.

Amathole District Municipality indeed incurred fruitless and wasteful expenditure. The matter has been referred to the Hawks for further investigation.

The next complaint deals with a R631-m contract awarded by Amathole District Municipality to a company named Siyenza, to build 66 000 toilets. The municipality is in the Eastern Cape. It was alleged the owner of Siyenza is politically connected. Mkhwebane found that the allegation of tender irregularity is substantiated, but found that there was no evidence that the tender was awarded as a result of political influence. 

The second complaint relates to the Department of Agriculture, Land Reform and Rural Development allocated a farm to the complainant but failed to approve funds for recapitalisation. The complainant was handed a farm in 2013 in Krokodilspruit, but alleged that the department failed to approve funds for the recapitallisation of the farm. Mkhwebane found that the complaint was substantiated.

In the first report, Mkhwebane investigated allegations of illegal evictions in the City of Tshwane. In this case, the complainant was found to be the rightful owner of the proper, the city failed to pay him and illegally evicted and demolished the building.

Mkhwebane is detailing five other reports, relating to various issues including a complaint about Uber and the City of Cape Town and illegal evictions by the City of Tshwane.

Mkhwebane is set to release her report on the establishment of the so-called 'rogue unit' at the South African Revenue Service in 2007. Public Enterprises Minister, Pravin Gordhan, was SARS commissioner at the time, and is implicated.

Mkhwebane's investigation into Gordhan has been extremely controversial. Read our analysis of why this is so:

Mkhwebane's daring experiment

Busisiwe Mkhwebane is on a daring experiment that could backfire badly. She is testing the powers vested in the office of the Public Protector against those that are within the realm of the head of the executive.

On this week's POLOTIKI podcast, our reporters unpack the controversy around the Public Protector:

POLITICS PODCAST: Ramaphosa vs Public Protector, and the cost of the EFF's 'tantrum'