SARS Commissioner Tom Moyane has briefed today that the revenue service was taken aback by the aberrant and unethical conduct of KPMG and is considering legal action against the audit firm.
This comes in a time when the audit firm had formally withdrawn its SARS report regarding a rogue spy unit within the SA Revenue Services (SARS) and the then Commissioner of SARS Pravin Gordhan been the mastermind of it.
SARS received an email from Norton Rose Fulbright acting on behalf of KPMG International on the morning of the 15 September 2017 containing the media statement. The statement left SARS shell-shocked, as KPMG unilaterally announced the purported withdrawal of its report despite the existence of a service level agreement (SLA) governing the relationship between KPMG and SARS.
KPMG violated the SLA agreement with SARS
The SLA agreement specifically points that the ‘Report’ is an exclusive property of SARS as it constitutes SARS intellectual property. SARS sees KPMG’s conduct as nothing else but a dismal attempt to portray SARS, its leadership, and in particular SARS Commissioner as incompetent, corrupt, inefficient and involved in a witch-hunt.
This abhorrent, unethical, and unprofessional conduct by KPMG has left SARS and its commissioner Tom Moyane to consider the following legal route:
1) Instituting legal proceedings against KPMG for reputational damage to SARS including but not limited to a civil claim;
2) Report KPMG to the relevant statutory audit bodies both locally and internationally;
3) Report KPMG to the Minister of Finance with the aim to blacklist KPMG for its unethical, immoral, unlawful and illegal behaviour.
4) Report KPMG to the Minister of Finance to consider stopping all work currently performed by KPMG in other departments as well as any work in the pipeline until all the work KPMG conducted for the state have been investigated and reviewed for quality and proper auditing quality and expected standards;
5) Immediately seize any work which KPMG is currently performing for SARS and assess the work KPMG has performed in the last 10 years with the aim to determine whether there was a value for money and whether SARS should demand its money back;
6) Report KPMG to Parliament through SCOPA and SCOF with the aim to investigate the immoral conduct of KPMG and determine the appropriate action.
KPMG has messaged SARS during its press briefing to clarify that it did not retract the SARS report, but only its findings and recommendations.
Moyane says ‘The KPMG report is not flawed’; Sikhakhane Report Correct
SARS has portrayed its shock that some former SARS employees and others who have been criss-crossing different media platforms while making unfounded and baseless conclusions as a result of KPMG’s media statement.
Regarding this, Tom Moyane has went on to say, “The KPMG report is not flawed. It confirmed the Sikhakhane report was the tip of the iceberg.”
During the period August 2014, the then Acting Commissioner for SARS, Mr Ivan Pillay Commissioned an Investigation led by Adv Sikhakhane SC with the mandate to investigate allegations that SARS ran a ‘Rogue Unit’.
Upon the appointment of the Commissioner for SARS, Mr Moyane in September 2014, the Sikhakhane Commission delivered a report on the 5 November 2014 with serious conclusions and recommendations. Chief amongst others, the recommendations was that indeed SARS ran an unlawful rogue unit, led by and reporting to Mr Pillay as well as some insidious and gross misconduct committed by both Mr Pete Richer and Mr Loggenberg.
The three employees interalia Mr Johan Loggerenberg, Mr Ivan Pillay, Mr Pete Richer, were charged as a result of the Sikhakhane report respectfully for the following dates 14 January 2015, 5 February 2015, as well as 02 April 2015 respectively. Instead of facing the hearing and clear their names, all of the three opted to resign, with Mr Loggerenberg resigning in February 2015 and Mr Pillay and Ritcher resigning in May 2015.
KPMG report was delivered to SARS late in 2015 and was only made FINAL on the 26 January 2016. It therefore follows that the disciplinary hearings against the above were not conducted as a result of the KPMG report but on the basis of the Sikhakhane report.
KPMG’s conduct an attempt to make SARS look incompetent
Speaking at a briefing on Monday, SARS Commissioner Tom Moyane said that the tax authority was taken aback by the aberrant and unethical conduct of KPMG.
He called KPMG’s actions a “dismal attempt” to portray SARS and its leadership, including the Commissioner, as incompetent, corrupt, inefficient and involved in a witch-hunt.
SARS is taking legal action against KPMG, for reputational damage to the tax authority. SARS will report KPMG to the relevant statutory bodies, locally and international.
SARS will report KPMG to the minister of finance to consider stopping all work performed by KPMG. SARS will also have work KPMG is performing for the tax authority stopped, and SARS will evaluate the work it did in the past 10 years to see if the tax authority has received value for money.
KPMG will also be reported to Parliament, to investigate the “immoral conduct” of KPMG and determine appropriate action.
( Reference: Fin24.com )