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Management consulting firm Bain & Company has not been forthcoming. It only divulges pertinent information when it is caught out in a lie and it misled the general public in a press statement with regards to the Sars commission.
These were the conclusions reached by an incensed retired judge Robert Nugent on Tuesday as he heard evidence from Bain & Company’s vice-president and general counsel, Stuart Min.
Nugent accused the management consulting firm of a lack of transparency over its failure to disclose the “numerous meetings between [Bain’s managing partner, Vittorio Massone] and suspended Sars commissioner Tom Moyane” before the inquiry commenced.
On the stand, Min, an American citizen based in the company’s Boston office, responded by saying that he was “not aware of the extent of the meetings” but also added that he thought that the meetings “were in accordance with Bain’s fundamentals of assisting executives with the support they need to realise their full potential”.
Min also argued that the meetings were not disclosed to the commission because Bain thought they were not relevant to the scope of the Sars inquiry.
He also justified Massone’s meeting with Moyane before he was even appointed as Sars commissioner as not being an unusual thing since “Moyane had already demonstrated ambitions of being head of Sars”.
Nugent, however, challenged Min’s argument saying “should informing the commission of the meetings not have been such a priority, the company would not have started scrambling as much as it did following Massone’s submission that he had meet with Moyane and only after that revelation decide to inform the commission of the meetings”.
The management consultancy firm has been accused of being appointed contrary to Sars tender procurement processes and for implementing policies that were detrimental to pivotal units within Sars such as the company’s ability to measure compliance and the capability to deal with illicit financial flows and high-profile investigations.
Massone is at the centre of Bain’s contract to design a new operating model that was allegedly used to break down the efficiency of Sars, resulting in the exodus of highly skilled employees and the syphoning of taxpayers money from the entity to those affiliated to Moyane.
In an affidavit by Massone read to the commission in his absence by evidence leader, advocate Carol Steinberg, Massone noted that Sars’ operating mode was too concentrated and needed to be reconstructed with a focus on the chief operating officer’s role – a position that was occupied by Barry Hore at the time.
This was part of Moyane’s key objectives for his first 100 days in office.
Massone also recommended that Moyane needed to “quickly build a healthy sponsorship spine [a list of people likely to be on board with changes at Sars] while addressing obstacles to change. These obstacles were reflected as yellow figures labelled ‘watch out’ and red figures labelled ‘neutralise’”.
Min argued before the commission that there was nothing sinister with the use of the term “neutralise”, saying the term referred do “assessing disgruntled employees and changing them from being detractors into promoters, in other words improving the satisfaction levels of currently disgruntled employees”.
Steinberg, however, challenged this, saying “notwithstanding Min’s explanation, we do know what happened within the first few weeks of Moyane arriving at Sars – he suspended his executive and by the end of the year there were already numerous resignations”.
Email correspondence between Massone and his colleagues submitted by Bain on September 3 2014 showed that he rejoiced after Hore resigned from the revenue services.
In this exchange Massone remarked: “Now I am scared by Tom. This guy was supposed to be untouchable, and it took Tom just a few weeks to make him resign”.
“This email suggests that the more innocuous reading of ‘neutralise’ is not, in fact, the correct one. There seems to have been right from the word go an identification of concentration of power in the chief operating officer’s job and an attempt to neutralise him and that is to get rid of him and that’s exactly what happened,” Steinberg argued.
Nugent also accused Bain & Company of misleading the general public in a press statement made by the company on Sunday regarding money it earned from Sars.
Bain’s announced on Sunday that it would use the R164 million it earned from Sars to better serve South Africa as prescribed by the Nugent Commission of Inquiry.
“This money will be used either as prescribed by the Nugent Commission of Inquiry or – in the absence of such prescription – for the benefit of South Africa,” read the company’s statement.
Nugent, however, inquired why the company had not contacted the commission if it really intended to take directive from the commission on how to use the money. He also said since the money had come from Sars – “why not give it back to Sars”.
Min then revealed that the company really intended to wait for the outcome of the inquiry before paying back the money.
An incensed Nugent asked why the company misleading the general public by saying it was in the process of paying back the money when that was really dependent on the outcome of the commission.
An unconvincing Min replied that the company was not yet sure how the money should be paid back.
“What I know is that money has been set aside and would ultimately be paid back,” said Min.
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