NEWS & ANALYSIS

SARS KPMG report has no validity - Former SARS Officials

Audit firm has admitted that they were contractually forbidden to engage with them by their client

JOINT MEDIA STATEMENT BY FORMER  SARS OFFICIALS

Mr Ivan Pillay, Mr Peter Richer, Mr Johann van Loggerenberg, Mr Yolisa Pikie and Mr Adrian Lackay

The South African Revenue Service (SARS) and KPMG

23 JANUARY 2016 – We have noted media reports and have received enquiries from the media, suggesting that SARS is now in possession of a report from KPMG, allegedly dated 4 December 2015, into allegations that relate to our tenure as former SARS officials. We note that once again, according to journalists, the report has been leaked to the media.

The public must know that none us have ever been engaged by KPMG during the process leading up to the alleged report. We were not afforded any opportunity to make representations on the allegations against us. Conducting investigations and making findings without giving affected parties a right of reply to allegations against them is procedurally flawed and untenable in law.

Thus we must caution anyone who may want to attach any value to a report that is the result of a legally questionable document and process. Until such time as we have been afforded aright to reply to its content, is of no consequence.

We have noted that KPMG was ostensibly instructed by SARS not to engage any of us in the course of their investigations. If proven to be true, this would raise further questions on the legality and value of such a report. A forensic report should be a result of scientifically determined facts rather than suppositions.

We have noted the allegations that KPMG placed a disclaimer on the report which renders it unusable in any "resolution or disposition forany dispute or controversies" and that it cannot be used or disclosed to any third party in part or full. If this proves to be true it should be a further caution to the credibility of the report's contents. It was claimed that the report would be of a forensic nature. Such a  disclaimer contradicts the notion of any  forensic findings.

Earlier requests during the course of 2015 to KPMG to engage them and be afforded access to their documents by some of us were denied. A Promotion of Access to Information Act request to KPMG was also declined. Instead, it was suggested that KPMG had "waived all moral rights" to their report. KPMG further stated that they were contractually forbidden to engage with us by their client, SARS. We find such a unilateral agreement on matters which quite clearly materially affect our rights, untenable in law.

The above clearly shows that the KPMG report was not intended to be an exercise in pursuit of the truth.

We have previously requested both the Ministry of Finance and the SARS Commissioner to investigate persistent leaks to the media of confidential taxpayer and employee information from within SARS. Some of us have also requested access to the KPMG report. We will address anew request in this regard through our attorneys.

We state once again, for the record, allegations that a particular unit in SARS was unlawful and illegal, operated front companies including a brothel, spied on taxpayers and entered into illegal settlements for tax disputes, gave certain taxpayers preferential treatment, infiltrated taxpayers, broke into homes and planted listening devices and the like, are all false and unsubstantiated.

In addition, the allegation that the particular unit in question purchased and used sophisticated spyware is pure nonsense. All of these matters can be easily dispensed with on a factual and evidentiary basis if an independent legal process is allowed. Such a process should naturally include affording us our right to respond to any allegations and present evidence in substantiation of our assertions or refute these allegations.

Issued 23 January 2016