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Auditing firm KPMG SA’s retractions of sections of its so-called Sars report “falls way short of the legal, moral and ethical obligations that rest on KPMG SA to correct the wrongs caused by the report and the process leading up to its publication”, said former Sars group executive Johann van Loggerenberg.
Van Loggerenberg said the firm’s apologies were “totally inadequate when measured against the immense harm caused to the economy, the country, a key state institution and many innocent individuals, their families and friends” for almost two years.
Van Loggerenberg, who was the head of the high-risk investigations unit at Sars (which became known as “the rogue unit”), had been under fire along with other former Sars officials and former finance minister Pravin Gordhan.
In September 2014, he was placed on special leave pending a probe into alleged misconduct, he was then formally suspended, and finally resigned from the revenue service in February 2015.
He went on to co-author a book titled Rogue: The inside story of Sars’s elite crime-busting unit, with former Sars spokesperson Adrian Lackay. Rogue tells their side of the story regarding the so-called rogue unit.
The attacks on the elite investigative unit started the moment it began investigating a giant cigarette smuggling ring which included companies that, at one stage, involved the president’s son Edward Zuma and his nephew Khulubuse.
Read: Why Sars unit was targeted
It was alleged that smugglers and racketeers did not only have members of the Hawks and the intelligence community in their pockets, but had succeeded in getting the investigative unit – one of the most effective tools in the fight against tax evasion and organised crime – closed down.
Van Loggerenberg’s lawyer, Brett Murison, from Boqwana Burns, said he was still in the process of taking legal advice and was “still considering the most appropriate action to take”.
In a statement released today, Murison said it was noteworthy that this retraction came only “after significant public outcry and questions being posed by some of their clients, leading to KPMG International conducting an ‘internal review’, and finding the report wanting within a matter of days.”
Murison said Van Loggerenberg was aware that KPMG (both SA and International) had met with Gordhan, his former deputy Mcebisi Jonas and former Sars employees Ivan Pillay, Peter Richer, Yolisa Pikie and Lackay.
Van Loggerenberg, who had not met with KPMG, “completely supported the sentiments as publicly expressed in their respective media statements following these meetings”.
He said Van Loggerenberg had tried to engage with KPMG SA and their attorneys, Norton Rose Fulbright SA, since October 15 2015, and KPMG International, since August 14 2017, but had found them to be “unresponsive and their communiques (when they did bother to reply) to be dismissive, evasive, inadequate and displaying scant regard for the laws and rules of the audit profession and the basic human rights of individuals”.
Van Loggerenberg believed that KPMG SA was obliged to disassociate itself from the report in its totality when it was made aware of issues he had raised with them.
• The report demonstrably omits multiple material facts, including evidence of a very serious nature, resulting in the suppression of evidence of criminal offences, significant losses to the taxpayer, the manipulation of state officials and agencies and the orchestrated disruption of and interfering in the statutory mandates of state agencies;
• The report is tardy, nonsensical and replete with errors, falsities, obfuscations and material misrepresentations;
• The report is incredibly selective in what it seeks to rely on and what it ignores, shoehorning these to fit into a particular false narrative of a supposed “rogue unit”;
• The report is riddled with multiple comments presented as if fact, when they are not;
• The report reflects statements that are contradictory and misleading, and completely ignores exculpatory evidence;
• The report contains many allegations that are illogical, unattributed, unsubstantiated and unsupported by facts;
• The report uncritically gives audience to and accepted unsubstantiated allegations made by third parties, in some cases by external persons who
approached KPMG SA, while failing to reflect on any reply or fair hearing of those pronounced upon;
• The report demonstrates that KPMG SA did not uphold the fundamental obligatory principles of fairness and integrity during the entire process that led to its compilation and publication;
• The process followed and the report itself are both materially questionable in law; and
• The report’s author/s failed to act fairly and with integrity as is required by both the Independent Regulatory Board for Auditors and South African Institute of Chartered Accountants.
