KPMG withdraws Sars ‘spy unit’ report findings

The report was partly responsible for the downfall of former Finance Minister Pravin Gordhan, who was accused of having known about and endorsed the unit.

CEO Trevor Hoole is among the eight senior staff who have resigne. Picture: Twitter/@TrevorHoole.

JOHANNESBURG - Auditing firm KPMG has withdrawn all of its findings and recommendations around its report into the so-called South African Revenue Service (Sars) “spy Unit” and announced a major shake-up to its leadership in South Africa.

The report was partly responsible for the downfall of former Finance Minister Pravin Gordhan who was accused of having known about and endorsed the unit.

CEO Trevor Hoole is among the eight senior staff who have resigned, while another faces disciplinary action and dismissal, following an internal investigation into work done for the Gupta family.

Leaked emails have revealed how the firm allegedly turned a blind eye to taxpayer funds being used to pay for the Gupta’s lavish sun city wedding.

KPMG has admitted that its report for Sars suggests Gordhan knew about the establishment of an intelligence unit that was set up illegally.

However, the auditing firm says this was not the intended interpretation and evidence provided to KPMG does not support this interpretation, saying it recognises and regrets the impact this has had.

The unit was accused of conducting covert intelligence operations, and these allegations led to Gordhan, who was the Sars commissioner at the time, being criminally charged. Although the NPA eventually decided not to prosecute.

This investigation has revealed a number of serious failings, and KPMG hopes that the actions that have been taken will restore trust.

KPMG OFFERS TO REPAY SARS FOR ‘SPY UNIT’ REPORT

International auditing firm KPMG says it has offered to pay back Sars R23 million for a report it compiled into the so-called “spy unit” or to make a donation for the same amount to charity.

The partner responsible for the report is no longer at the firm and the company says it recognises and regrets the impact that this has had.

The internal investigation’s findings have revealed serious failing at firm, with regards to this report which resulted in political implications and with regards to the association and handling of the Gupta family accounts.

At the same time, KPMG international has canned the Sars “spy unit” report and cleared out its South African leadership.

However, former Sars spokesperson Adrian Lackay says many people have been affected by this report and KPMG didn't give them to the opportunity to refute the claims.

“People have lost their jobs, careers and their reputations have been harmed.”

Meanwhile, Lackay has laid a case of constructive dismissal against Sars, arguing his working conditions became unbearable amid allegations of the rogue unit’s existence.

(Edited by Zamangwane Shange)