Natasha Marrian Political editor: Business Day
Jonas Makwakwa. Picture: SARS
Jonas Makwakwa. Picture: SARS

Anticorruption lobby group Corruption Watch has asked the SA Revenue Service (Sars) commission of inquiry to look into  allegations that international law firm Hogan Lovells whitewashed its report on allegations of suspicious transactions in the bank account of former Sars second-in-charge, Jonas Makwakwa.

A Financial Intelligence Centre (FIC) report in 2016 identified 76 transactions, totalling R1.2m,  which were channelled into the personal bank accounts of Makwakwa and his girlfriend, Kelly-Anne Elskie. 

The Corruption Watch submission details Hogan Lovells' role in the investigation into the transactions contained in the FIC report, and in turn the law firm has responded to the allegations in a lengthy submission to the commission.

However, both submissions may be in vain after commission chair, retired judge Robert Nugent, stated clearly that he was staying away from issues being dealt with in suspended commissioner Tom Moyane's disciplinary process. 

Any impression created that (it) was instructed to investigate the FIC report as an entity independent of SARS, is wrong.
Hogan Lovells

In its submission to the commission, Hogan Lovells, which has been subject to a confidentiality agreement until Sars waived it on May 23, makes a startling admission for the first time. The law firm says that "any impression created that [it] was instructed to investigate the FIC report as an entity independent of Sars, is wrong."

This contradicts previous statements from Moyane, who had repeatedly said that Hogan Lovells was investigating the allegations in the FIC report, when grilled about how he was dealing with the Makwakwa matter, including in parliament.

Moyane's handling of the FIC report is among the disciplinary charges he faces before advocate Azhar Bham.

Moyane reinstated Makwakwa to his post in November 2017, saying that the probe by Hogan Lovells and a subsequent disciplinary inquiry had cleared him of all charges. Makwakwa then resigned in February, after fresh allegations of a conflict of interest surfaced against him. Moyane was suspended shortly after this. 

The commission did not respond to questions on Wednesday on how it would deal with the submissions. The disciplinary process by Bham against Moyane has also, however, come to a halt after Moyane approached the Constitutional Court.

Nugent made it clear that he was steering clear of issues being dealt with by Bham —  the FIC report is one of them.

Nugent presented an interim report to President Cyril Ramaphosa, released last Tuesday, recommending that Moyane be removed immediately and a permanent commissioner be appointed to stabilise Sars. Nugent was criticised for this by Moyane's lawyer, Eric Mabuza, who argued that the judge had "treaded" on the grounds of the disciplinary process. 

But Nugent on Thursday denied this, saying that he has intentionally kept away from matters covered by the disciplinary. 

"The fact that we end up recommending that the commissioner should be removed and removed urgently is coincidental."

marriann@businesslive.co.za