Category Archives: SARS

Minister Pravin Gordhan


1.On behalf of our client, Min Gordhan, we lodged an urgent application today to suspend and interdict enforcement of the remedial orders by the Public Protector and also to review her Report, No 36 of 2019/20 – “Report on an investigation into allegations of violation of the Executive Ethics Code by Mr Pravin Gordhan, MP as well as allegations of maladministration, corruption and improper conduct by the South African Revenue Services” (sic) (“the Report”).

2. In summary, the application is undertaken for the following reasons:
In terms of the Public Protector Act, the Public Protector must justify or provide “special circumstances” to entertain any complaints regarding events or conduct that is more than two years old. Despite repeated requests for an explanation on what “special circumstances” she relied on for this investigation of matters from as far back as 2007, none has been forthcoming;
The Public Protector misunderstands the law to arrive at a pre-determined outcome relating to the powers of intelligence services. There is no legal obstacle to SARS establishing an investigative unit to deal with the tax implications of organized crime and illicit trade like cigarette smuggling. In fact, this capacity is being re-established thanks to the findings and recommendations of the Nugent Commission of Inquiry;

The Report ignores facts and their significance to reach its findings regarding the establishment of the SARS investigative unit. Among these are the discredited Sikhakhane panel report and its erroneous legal reasoning, the Sunday Times’ apology in April 2016 for its reporting relating to the SARS unit, Judge Kroon’s apology to the members of the unit for not interrogating the issues and making wrong findings, KPMG’s withdrawal of its report and refunding of the fees earned for it.

The Public Protector misapplies the provisions of the Constitution and applicable legislation when making adverse findings. For example, section 209 of the Constitution regulates the establishment of intelligence services. It does not prevent SARS from establishing an investigative unit.

3. The application by Min Gordhan also seeks to review and set aside the Report and have it declared unlawful, unconstitutional, irrational and invalid. (Part B of the Notice of Motion)

Part A
4. Among other things, the court is asked to:
declare that the Public Protector’s remedial orders are suspended, until the judicial review of the Report is concluded; and
interdict the Office of the Public Protector (first respondent) and Adv Busisiwe Mkhwebane (second respondent) from enforcing the remedial orders until a judicial review of the Report is concluded.

Part B
5. In terms of Part B an order is sought in the following terms:

It is declared that the Public Protector, and Advocate Mkhwebane personally, acted in breach of their constitutional duties to be independent and to exercise their powers and perform their functions without fear, favour or prejudice.
It is declared that the Public Protector, and Advocate Mkhwebane personally, dishonestly or, alternatively, recklessly made her findings in the Report against Min Gordhan, in that they knew that the findings were false or were reckless as to their truth.
The Public Protector, and Advocate Mkhwebane personally, are ordered, jointly and severally, to pay the applicant’s cost on the scale of between attorney and client.

6. As Min Gordhan states in his affidavit:

“228 Finally, whilst I have great respect for the Office of the Public Protector I doubt the competence, integrity, legal literacy and constitutional grasp of its incumbent of her powers, duties and functions.

“229 Whilst it is unfortunate that these sentiments must be expressed, I maintain that the suspension and interdict will be in the overall interests of justice because I strongly doubt the bona fides of the Public Protector in investigating and issuing the Report. The Public Protector has confirmed that I am the subject of three ongoing investigations by her office, I am not aware of anyone who has been singled out and pursued by her Office in this way…

“231 Instead of dealing with the pressing complaints of citizens, she is using the office for ulterior motives or the political motives of others. My belief is that the resources of this esteemed office are best employed doing what it was constitutionally envisioned to do i.e. protect the public from ongoing maladministration and not abused for improper and blatantly political motives.

“232 The competence and credibility of the Public Protector and her understanding of the Constitution have already been negatively pronounced on by Courts. Above, I discuss in detail the adverse costs order that has been made in respect of her, the scathing critique by the Courts made against her and the applicants who have successfully interdicted the release of her reports, because she denied them procedural fairness, or have had those reports set aside on the basis that her findings were unconstitutional and unlawful…


“234 In light of what is set out above, Adv Mkhwebane should be ordered to pay the costs of this review application personally and on a punitive scale.

“234.1 Once again, she has demonstrated that she is unfit to hold the Office of Public Protector.

“234.2 She continues to ignore her constitutional mandate, act without regard to the provisions of the law and seemingly in service to some other motive or agenda.

“234.3 Her conduct is the latest example of her now lengthy history of acting incompetently, unlawfully, unconstitutionally, unfairly and unjustifiably.

“234.4 An adverse costs order would be one way for this Court to join in those earlier efforts to correct her approach to her important work.

“234.5 Indeed, her seeming lack of reflection on her role and powers in light of those other decisions is a further basis for the costs order against Adv Mkhwebane.

“234.6 The taxpayers of South Africa should not have to continue to fund her unlawful conduct.



In response to a request from KPMG, our group today met the leadership of KMPG South Africa, led by the new CEO Ms Nhlamu Dlomu, and with members
of KPMG International.

The meeting was without prejudice and we reserve our legal rights as parties who were adversely affected by the work of KMPG on behalf of its client, the South African Revenue Service (SARS).

Today was a preliminary, first meeting. We appreciate the efforts by KPMG to finally afford those affected by the forensic investigative report to SARS, the opportunity to be heard.

At the same time, we remain convinced that KPMG¹s conduct has caused immense harm to a number of experienced individuals, their reputations and careers as public servants, and it damaged institutions like SARS.

We believe KPMG should make full and frank disclosure about their past conduct and institute credible initiatives to make right the harm that was caused to numerous individuals, to public institutions, to our country and the economy.

In our view, the findings of the KPMG forensic report to SARS, became the basis for the aborted criminal prosecution of the former Finance Minister, Mr Pravin Gordhan, the former SARS Deputy Commissioner, Mr Ivan Pillay, and others, during October 2016.

The decision by the National Director of Public Prosecutions to issue summons against these individuals, and against Mr Gordhan in particular, days before the October 2016 Medium Term Budget Policy Statement, caused intractable economic harm and uncertainty.

To date the allegations of that a covert and rogue intelligence unit
was established by SARS in contravention of the rule of law have been substantially disavowed. As this aspect was the central focus of the forensic report to SARS, we trust that this report will in future be withdrawn in full.

As our rights are reserved, including the right to seek legal recourse,
we will not make further public statements on this matter at this time.

Minister Pravin Gordhan

Statement by Pravin Gordhan on KPMG “admissions”

Although I welcome the withdrawal of the KPMG SARS report, I am surprised by the scant regard shown for their role in the capture of
the revenue service and the huge damage that it has done to the
livelihoods and reputations of a very professional, honest and loyal
group of public servants. It is unfortunate that a company with the
stature of KPMG, with a responsibility and obligation to be objective, has been found to be wanting. This is exacerbated by their collaboration with the Gupta family.

So let me categorically state, that which KPMG ought to have had the integrity and honesty to state:

The Research and Investigative unit created in the South African
Revenue Service (SARS) was legal. Its activities in detecting and combatting the illicit tobacco trade and other efforts aimed at bringing an end to tax evasion, were within the law.

KPMG had no basis, except subservience to a malicious SARS management, to malign a number of individuals and facilitate, I repeat, the capture of a vital state institution.

The witting and over-enthusiastic collaboration of senior KPMG personnel (whether in current employment at KPMG or not) and their collusion with nefarious characters in SARS, in fact directly contributed to state capture and gave legitimacy to the victimization of good, honest professionals and managers. It should and must be remembered that this was about attacking SARS as an institution with the main intention being to capture it.

These are the symptoms of deteriorating levels of governance and the gravity of state capture. The saddest consequences about this is the negative impact it has had on the lives of all those that were and
continue to be persecuted ­ if the latest actions of the Hawks and NPA are anything to go by.

KPMG international did not implement its own criticism of KPMG South Africa ­ that those affected by their alleged findings should be given a hearing. Did they talk or even attempt to contact the senior officials who were victimized at SARS? Why has there been no direct contact with myself, to convey a sincere apology? This is typical colonial arrogance and KPMG has not done enough. One would have expected KPMG to have the courage to admit, in the face of their own investigation, that the establishment of this unit was in fact legal. This option still remains
open to them.

I note their  regret  but doubt whether this is adequate and proportional to the damage that KPMG has done. I will be seeking legal advice in this regard. Whilst there has been personal consequences the real issue that confronts us is the significant damage to our hard won democracy, to our state institutions and ultimately to the South African people for whom we seek a better life.

South Africa has been severely affected by the ills of state capture, and by the individuals and institutions that either enable or seek to
implement it.

This may be a small step in the right direction to hold corporates
accountable for their wrong doings as well as the beginning of what
reparations will be to make things right. KPMG has a lot more to do to convince South Africans that they will undergo a genuine change in culture and ethics and are prepared to take total ownership for the damage they have caused or contributed to.

If they are truly remorseful they must provide equivalent employment to Ivan Pillay and others as a corruption fighting unit within KPMG itself.

To South Africans, I say take strength in your collective action to hold accountable, all those responsible for the demise of the quality of our democracy and the decimation of state institutions.