KPMG’s ‘rogue unit’ report stands — Moyane

• • Commissioner wants audit firm blacklisted Withdrawal of report part of a ‘conspiracy’

South African Revenue Service (SARS) commissioner Tom Moyane rounded on KPMG on Monday, insisting that the report it had compiled on the “rogue unit” stood, despite the audit firm having withdrawn it.

KPMG faces the prospect of legal action from former finance minister Pravin Gordhan, who was implicated in the report.

Moyane was left with a public relations nightmare last Friday, when KPMG withdrew the report, citing shortcomings. But Moyane argued on Monday that the audit firm had no authority to withdraw its findings and recommendations, saying KPMG had relinquished all rights to the report when it was handed over to SARS in December 2015.

In an attempt to repair the damage to its reputation, caused by its handling of politically sensitive accounts, KPMG has been drawn into a wider political battle, particularly the one raging within SARS over the activities of an alleged “rogue” or “covert unit” at the tax agency that was used in an attempt to discredit Gordhan during his short stint as finance minister after the axing of Nhlanhla Nene in December 2015.

In a bizarre briefing, which included member from Parliament’s standing committee on public accounts (Scopa) Nyami Booi, Moyane lashed out at those “with an agenda” and questioned KPMG for singling out the SARS report as the audit firm sought to clean house.

Booi’s presence caused confusion at the briefing. The EFF said it would write to speaker Baleka Mbete to call the committee to order over Booi’s presence at the briefing.

“Nothing related to Parliament was being discussed at the press conference, or even to the remit of Scopa.

“We are all, therefore, left to assume that Booi wanted to create an impression that in the war between KPMG and SARS, or even former employees of SARS who lost their jobs due to the KPMG report, Parliament is in support of Tom Moyane and

2015 The year the KPMG report was handed over to SARS

SARS,” said the party’s spokesman Mbuyiseni Ndlozi.

“This is dangerous and must be condemned with the contempt it deserves.”

Moyane has referred KPMG to the public accounts committee and has written to Finance Minister Malusi Gigaba to blacklist the audit firm from doing business with the state.

However, KPMG is regulated by the Independent Regulatory Board for Auditors (Irba), which is set to report to the standing committee on finance on October 3 on the status of its investigation into the firm.

The committee, under which SARS falls, was neither invited nor was it aware of the media briefing held by Moyane on Monday, its chairman Yunus Carrim said.

While Moyane is willing to take KPMG to court, he emphasised that the report was not used to provide impetus to the narrative of the existence of a “rogue unit” at SARS. Rather, Moyane said, other sources of information were relied on.

Moyane was not riled by the fact that KPMG had identified weaknesses in the quality of its report, but at the fact that the report was withdrawn despite a service-level agreement in place between SARS and KPMG over rights to the report.

Moyane said KPMG was part of a grand conspiracy to paint the tax agency as inefficient and corrupt, although he would not say who was behind it.

He said SARS would bring a civil claim against KPMG for reputational damage.

Moyane emphasised that disciplinary procedures under way against former SARS officials were not based on the KPMG report as suggested.

Rather, they are based on the Sikhakhane Report — the outcome of an internal investigation headed by advocate Muzi Sikhakhane.

This report had found “prima facie” evidence of an unlawful unit and had recommended the setting up of a judicial commission of inquiry.

In a tacit swipe at Gordhan — who was implicated in the KPMG findings — Moyane said those claiming to be exonerated from possible criminal offences due to the withdrawal of the KPMG report were “misleading South Africans”.