Sars investigator accused of misconduct
NPA to withdraw fraud charges against Mol Pro amid doubts over integrity of revenue officials
● The National Prosecuting Authority (NPA) is withdrawing charges — for the second time — against a company accused of tax fraud involving more than R100m after allegations of irregularities in an investigation by the South African Revenue Service (Sars).
The allegations were made in representations to the NPA by the company, Mol Pro Consulting, which says it received internal Sars documents that show misconduct by senior officials in the tax agency’s anti-corruption unit (ACU) and criminal investigations (CI) unit.
The saga has its origins in an apparent cyberattack on Mol Pro’s e-filing profile in which hackers changed details of previous tax filings by the company.
The company reported this to Sars, but in 2019 the NPA brought fraud charges arising from the same data that Mol Pro said had been tampered with.
Company director Khothatso Moletsane said at the time that the CI unit was acting maliciously. In turn, the unit said it did not believe Moletsane’s version because the company’s banking details had not been changed on its e-filing profile, which was the usual modus operandi in such cyberattacks. The hackers would claim rebates on the basis of the altered filings, and divert the money into their own accounts.
The first set of charges were provisionally withdrawn pending further investigation. But a new case was enrolled in December 2022 featuring 19 counts of tax fraud allegedly committed between 2010 and 2019.
Khothatso, 49, his brother and co-director Tumelo Moletsane, 54, and the company itself were charged with defrauding Sars of about R116.7m by under-declaring Mol Pro’s trading activities. The R116.7m is made up of R83m of actual prejudice and R33.7m of potential prejudice to Sars.
In the representations to the NPA, lodged in November 2023, the Moletsanes’ advocate said they had received internal Sars documents — through a protected disclosure — that showed collusion between the ACU and CI to cover up findings that a CI investigator, whose name is known to the Sunday Times, had flouted governance regulations in her original probe into Mol Pro.
Other accusations in the internal documents include that:
● The CI investigator tried to influence an earlier audit by Sars into Mol Pro by asking the auditor involved to use her report, which recommended criminal action;
● The company was charged after the investigator removed Mol Pro’s file from Sars in Gauteng and took it to her office in the Free State; and
● Sars officials concealed the fact that the ACU had confirmed the existence of a syndicate of ex-Sars employees who sought to extort companies by changing the information on their e-filing profiles, which would attract a Sars audit. The syndicate was traced, with the help of police Crime Intelligence, to offices in Pretoria.
The representations quote a June 2023 email from Fred Salimane, Sars integrity and ACU lead, to his supervisor Fred Murray in which he says Moletsane’s complaint of malicious intent by CI fell within the ACU’s mandate and it had launched an investigation.
The report from this investigation, dated October 24 2023, said the CI official involved “has not co-operated with ACU investigations until this day. Instead, her manager/specialist [name withheld] took it upon himself to be the one who engages with ACU on her behalf.”
The report said the NPA “was misinformed with regards to the profile hijacking, which makes their response to the [Mol Pro] defence untrue and lack credibility”.
But the following month, in November, Khothatso received a letter from the ACU informing him that it had been determined that the unit did not have the mandate to investigate his complaint.
At about the same time, the ACU advised the NPA that two other people should be charged along with the Moletsanes and Mol Pro — the alleged hacker and a former employee of the company who is believed to have shared log-in details for the e-filing profile with him.
The representations from the Moletsanes’ advocate said: “The letter of the ACU is clearly unlawful conduct of the gravest nature given that the unit is tasked with preventing the very thing that it has done in this case. In addition to being expected to conduct a proper investigation in this matter, it cannot be the body now concealing findings that are exculpatory of the accused.
“Thus, whatever the findings the ACU will or has given to the NPA in this regard are unlawful and further steps against the ACU itself are being considered by the accused.
“The act of wilfully and deliberately misleading the NPA is not only a criminal offence but also places all the constitutional rights of the accused in jeopardy,” the advocate said.
Sars declined to comment, saying the Tax Administration Act prevented it from doing so.
The NPA had not responded to questions at the time of going to print, but the Sunday Times has seen a copy of a letter to the Moletsanes’ advocate signed by advocate Rodney de Kock, the deputy national director for public prosecutions, in which he said: “I have carefully considered your representations and in consultation with the director of public prosecutions, Free State division, I have decided to provisionally withdraw the charges against your clients pending further investigations.”
Despite this, Khothatso is still upset. “I have been down this road with them [NPA and Sars] before, and I don’t trust them one bit. They provisionally withdrew in October 2021, only to arrest us again. They are just refusing to take responsibility and do the right thing,” he said.
“We are going for our 22nd appearance on February 23, with no trial. This is triple jeopardy now.”
The NPA is expected to provisionally withdraw the charges at that court hearing, in Bloemfontein.
Previously, Khothatso has said the livelihoods of him and his brother have been destroyed over the past five years and they could not find work due to the criminal charges hanging over them.