Pravin Gordhan. Picture: FREDDY MAVUNDA
Pravin Gordhan. Picture: FREDDY MAVUNDA

Public protector Busisiwe Mkhwebane has found that public enterprises minister Pravin Gordhan acted improperly when he approved the early pension payout for former SA Revenue Service (Sars) senior official Ivan Pillay. 

“The allegation that minister Gordhan irregularly approved the early retirement of Mr Ivan Pillay with full retirement benefits …is substantiated,” Mkhwebane said. 

In her remedial action, the public protector instructed President Cyril Ramaphosa to take disciplinary action against Gordhan for “violating the constitution”. 

The early pension payout was made during Gordhan’s first stint as finance minister. Oupa Magashula was Sars commissioner at the time. 

A complaint was lodged with the public protector’s office in November 2016 alleging that Gordhan and Magashula had acted dishonestly with regard to public funds, which resulted in Pillay receiving an improper advantage or being unjustifiably enriched at the expense of the taxpayer. 

Mkhwebane said Pillay was not entitled to an early retirement payout. 

The release of the report comes amid mounting allegations of witch-hunt against Gordhan. 

The National Prosecuting Authority (NPA) withdrew charges linked to the pension payout against Gordhan, Magashula and Pillay in October 2016. Mkhwebane received a complaint about the matter in November 2016 and only acted on it in February 2018.

A 2009 memorandum from then Sars legal officer Vlok Symington legally cleared the early retirement. It suggested that Gordhan, Pillay and Magashule had acted on legal advice.

Mkhwebane said the public protector’s office did a different job to the NPA. She said the prosecuting authority focused on the criminal conduct of people, while her office focused on clean governance.

It is likely that Mkhwebane’s report will be taken to court on review.

The public protector said every person being investigated had the right to take her reports on review.

“We will try our level best to defend ourselves,” she said.

Mkhwebane’s findings come days before Ramaphosa is expected to announce his cabinet, which could well include Gordhan. 

Asked about the timing of her briefing, she questioned whether she must not issue reports because of certain events taking place around the country.

“I must do my work without fear or favour, why must events prevent me from doing my work?”

In the summary of her report, Mkhwebane said Pillay had not requested the early retirement, nor did Magashule recommend to Gordhan that he contemplate the retirement.

“There was no retirement in fact and in law. If there was no retirement in fact and in law, it can be concluded that Mr Pillay was not entitled to early retirement with full pension benefits under any statutory provision,” she said.

Mkhwebane said even if the retirement had been contemplated and there was, in fact, a retirement, Gordhan was not authorised to approve it.

She said the payment also amounted to irregular expenditure.

In her remedial action, Mkhwebane also ordered that the Sars commissioner set in motion steps to recover the money, paid as actuarial deficit or penalty on behalf of Pillay by the revenue service to the Government Employee Pension Fund. 

quintalg@businesslive.co.za