SARS won’t place reliance on Sikhakhane ‘rogue unit’ report going forward

South African Revenue Service (SARS) Commissioner, Edward Kieswetter has written to Advocate Muzi Sikhakhane SC notifying him that the revenue service can no longer place reliance on his rogue unit report, given the developments around the spy unit within Sars.

The letter which has since been widely circulated on social media, is dated 16 November 2020, the day that Advocate Sikhakhane appeared at the State Capture commission on behalf of former president Jacob Zuma seeking a recusal of the chairperson, Deputy Chief Justice Raymond Zondo.

“The Nugent Commission of Inquiry recommended that SARS  must consider reparations, not necessarily pecuniary in nature, for current and former employees who had been negatively impacted by the now discredited rogue unit narrative and by unscrupulous actions taken”, said Kieswetter.

SARS commissioner Edward Kieswetter

Kieswetter revealed that SARS had already initiated and almost completed an internal reparations process for current SARS employees. Beyond that he stated that SARS, together with KPMG had since initiated reparations with some former employees.

The International Auditing firm which had been appointed to look further into the details of the Sikhakhane report, had since withdrawn its findings and recommendations on the rogue unit.

KPMG conceded that its SARS report suggested then Finance Minister Pravin Gordhan knew of the illegally established unit.

Advocate Sikhakhane was appointed in 2014 by then acting SARS Commissioner Ivan Pillay,  after media reports of the spy unit surfaced.

The external panel led by Sikhakhane was to conduct an investigation into the allegations of impropriety against  Johan van Loggerenberg, who was  SARS’s Group Executive for Projects, Evidence Management and Technical Support.

A complaint had been brought against Van Loggerenberg by his former lover Belinda Walter, an attorney and director of Belinda Walter Attorneys in Pretoria. Walter’s alleged  that Loggerenberg ran a covert unit within SARS, unlawfully revealed taxpayer information, engaged in unlawful interception of conversations and initiated their romantic relationship with the sole purpose of obtaining incriminating information about her clients in the tobacco industry . Sikhakhane’s panel found that the so-called rogue unit had been unlawfully established.

Kieswetter said given the developments at the Nugent commission where the former head of the SARS advisory board , retired Judge Frank Kroon admitted to the  commission that they were wrong about the “rogue unit” , they could no longer rely on the report by the advocate.

“You authored the Sikhakhane report. SARS’ propriety interest in the report does not give SARS the power or capacity to withdraw the report. However lacking this authority does not prevent SARS from expressing a view of taking a position regarding the ‘standing’ of the report”, he said.

SARS commissioner Edward Kieswetter

“ I therefore avail of this opportunity to communicate to you that taking into account the history of and developments around the Sikhakhane report, the need for all affected parties to find closure as well as the need for SARS  to move forward fulfilling its vitally important mandate, SARS holds the view that it will not place reliance on nor utilise the report for any purpose”.

SARS Commissioner Edward Kieswetter