COMMISSION OF INQUIRY
How Sars ‘rogue team’ targeted employees
A tobacco task team, set up in the SA Revenue Service (Sars), which was seen as the "new rogue unit", targeted investigators and the internal tax agency instead of focusing on big businesses.
The commission of inquiry chaired by retired judge Robert Nugent on Wednesday heard testimony from two senior managers at Sars’s internal fraud investigation unit.
Yousef Denath, a senior manager at the anti-corruption unit at Sars, detailed how he was suspended based on "sham" charges brought against him by an alleged "new rogue unit" formed under Sars commissioner Tom Moyane’s watch and spearheaded by Sars investigator Yegan Mundie.
Denath went through a disciplinary process and was cleared of all charges.
He returned to Sars early in 2018 after a year and three months on suspension.
Mundie has since resigned from the revenue service before facing charges of misconduct.
Denath said he was suspended the day Gobi Makhanya — who previously headed Sars investigations in KwaZulu-Natal and was then a member of the tobacco task team — was appointed head of Sars’s internal fraud investigation unit.
He said from that day the fraud investigation unit and the tobacco task team merged. The purpose of the unit was now to target investigators who were probing the cigarette industry, he alleged.
Denath said he believed he was targeted because Moyane and his loyalists wanted to take over internal investigations.
Denath was accused of collaborating with British American Tobacco to undermine other players in the tobacco industry, which apparently led to the investigation against him.
There was also a complaint lodged that Sars officials were intimidating and harassing cigarette manufacturing tycoon Yusuf Kajee, former president Jacob Zuma’s son Edward and controversial businessman Mark Lifman. This allegation was made in a memo authored by Mundie.
When asked who was making these decisions, Denath said "it was driven by Tom Moyane", supported by people such as Hlengani Mathebula, Sars’s chief officer of governance, international relations, strategy and communications, and Luther Lebelo, its chief officer for human capital.
Both men are expected to testify at the commission.
Another witness, who was also a senior member of the internal fraud investigations unit, told the commission that under Moyane, Sars’s investigative capacity was diminished. The witness, who did not want to be identified, told the commission about the tobacco task team and how it had not investigated any matters relating to the industry since 2015.
In April 2018, the witness was appointed acting executive of fraud investigations and started to review the work of the tobacco task team. She found that the team had not registered their cases through the governance process at Sars.
She explained how, at the revenue service, there was a separation between who evaluated and determined whether something should be investigated and who actually investigated the matters.
The witness said the tobacco task team used cigarette smuggling as an umbrella project to investigate and take disciplinary action against Sars employees.
"The types of things they dealt with was behavioural issues … They took disciplinary action around that.
"I did not see from those cases that they were really cracking down on cigarette smuggling," she told the commission.
"I still don’t understand; it was our [fraud investigations] mandate to conduct internal investigations. They should have been referred to us to investigate and deal with.
"From my view they were investigating internal staff, which included Sars investigators who were investigating cigarette smuggling."
She said the cases the fraud investigation unit was working on at the time had diminished in number and the severity of what was being reported had been watered down.
The witness said she recommended to acting Sars commissioner Mark Kingon that the tobacco task team be closed down, which he agreed to.