Statement on the fiasco involving the SARS Commissioner, KPMG and Guptas

19 September 2017

Yesterday’s opportunistic attack on KPMG for all of the wrong reasons by the SARS Commissioner, Tom Moyane, underlines the fact that if there has been state capture by corporate interests, there has also been the active perversion of private corporate activities by corrupt elements from within the state. It is common knowledge that Moyane relied on the KPMG “rogue unit” report to engineer the dismissal of key SARS personnel dealing with sensitive matters related to state capture. It is also evident that the “findings” of the KPMG report were in fact predetermined by instructions from within SARS. KPMG has now, quite correctly, disavowed these “findings”, while Moyane, instead of getting to the bottom of who in SARS pushed KPMG in this direction, defends these concocted “findings”.

Equally problematic with yesterday’s SARS press conference was the presence of ANC MP and SCOPA member, Nyamazeli Booi. How on earth does he justify his presence, clearly in support of the SARS commissioner, when SCOPA is (or should be) actively over-sighting both KPMG and SARS itself? Booi’s zealous defence of the line taken by Moyane will inevitably lead to a public impression that he too is complicit in a cover-up.

None of this is to suggest that KPMG’s own conduct has not been absolutely deplorable. KPMG’s apologies, firing of six of its top South African management, and its disavowal of the findings in the “rogue unit” report are all far too little, and too late. Not only has their role resulted in the destruction of the careers of honest and patriotic public servants, but it has deprived one of the best performing public institutions of professional capacity with all of the damaging impact that this will have on public resources.

What must happen to the Guptas must also happen to KPMG with equal force

What must happen to the Guptas in connection with their widespread, reported involvement in state capture and associated corrupt and fraudulent activities must apply to KPMG with equal force. The money and assets that were acquired from such activities must be seized and restored to public revenue and the law must take its full course.

The capitalist model involving hollowing out of the state and fostering dependency on private companies to deliver on its functions is the direct cause of the widespread problem of tender corruption and state capture. The SACP reiterates its call for the transformation of our existing state towards a democratic developmental state with organic, technical and professional capacity and strategic discipline capable of directly delivering on its mandate.     

KPMG must be held accountable with immediate effect for its role in manufacturing the “SARS rogue unit” propaganda, and in converting the cost of the 2013 Waterkloof military airbase landing Gupta wedding to a business expense. The wedding was reportedly funded from looting of state funds from a dairy farm in Vrede, Free State Province. The fiasco shows how private companies such as KPMG are making use of their so-called credibility, which has become uncritically accepted, to legitimate wrongdoing.

KPMG has to respond to claims that it assisted, or at the very least, turned a blind eye to the money laundering related to the wedding and the Guptas money laundering more generally.  

Similarly, the contradictory posture by the SARS Commissioner Mr Tom Moyane at his press briefing yesterday that the he will institute legal action against KPMG for the so-called reputational damage, including launching a civil claim, while insisting that he stands by the annulled KPMG report that the company has withdrawn is irrational. It is very clear that Moyane relied on the withdrawn report to pursue what clearly came across as a political witch hunt against the former Minister of Finance Cde Pravin Gordhan, who was pursued by the Directorate for Priority Crime Investigation (Hawks) and eventually removed from office.  Moyane’s contradiction and overall conduct of affairs must be brought under scrutiny and addressed according to the rule of democratic law.

Issued by Alex Mohubetswane Mashilo, National Spokesperson, SACP