SABC News - Sars mulls legal action against KPMG:Monday 18 September 2017

Sars mulls legal action against KPMG

Monday 18 September 2017 16:48

Amina Accram

Sars Commissioner Tom Moyane says they will further report KPMG to relevant bodies and the Minister of Finance.

Sars Commissioner Tom Moyane says they will further report KPMG to relevant bodies and the Minister of Finance.(SABC)

The South African Revenue Services (Sars) says it will institute legal action against auditing firm KPMG.  The firm rescinded its findings and recommendations contained in its rouge unit report published in 2015.

Sars Commissioner Tom Moyane says Sars was not given time to respond to the KPMG statement last week and that the auditing firm has an agenda against Sars.  

Moyane says they will further report KPMG to relevant bodies and the Minister of Finance.  

He was briefing the media earlier on Monday in Pretoria.

Moyane says KPMG actions were a dismissal attempt to show Sars as a corrupt, inefficient and incompetent organisation.

Sars says it will institute legal action against KPMG for reputational damage.  

It wants the firm blacklisted after retracting its Sars report.

"Sars has been taken aback by KPMG unethical misconduct. KPMG announced the withdrawal of its report despite the existence of a service level agreement governing the relationship between the two parties. The report belongs to Sars as KPMG has surrendered all rights to Sars and is an exclusive property of the Sars and constitutes Sars intellectual property."

Former Finance Minister Pravin Gordhan is currently seeking legal advice following the withdrawal of the report

Sars is also calling for the minister to stop all work created or done by KPMG. It will report the firm to Parliament through Standing Committee on Public Account (Scopa) and Standing Committee on Finance (SCOF) with the aim to investigate the firms’ conduct.

The commissioner says he stands by KPMG’s initial report and believes it was not flawed. He does not understand why the firm recalled its report after publishing it.

“The report of the Skekane ... the concerns that were raised by the ministry and it mentioned that there was wrongdoing and illegality of conducting and collecting information outside the preview. It was a report that was conducted in the previous administration which I inherited without contaminating and without changing the terms and conditions."

Sars says KPMG has an agenda against them and they should be held accountable.

“We find it very strange that all seven gentlemen and ladies decided to leave on one single report. The questions that begs to be answered is 'how many reports under their leadership; how many reports that they were in charge of failed to stand the scrutiny of quality assurance?' And I find it very strange that there should be an axis between us and other organisations that are mentioned there."

Member of the Standing Committee on Public Accounts Nyama Booi says KPMG will have to justify why they should continue to do business with government. 

Scopa can call on government not to use certain auditing firms if they are found to be unethical.

“We thank the opportunity that Sars is providing for us to get to the bottom of what has been said and take a serious look at how KPMG has been able to handle this particular matter. This is taxpayers’ money and it is in the interest of South Africans to know how deep KPMG played a role. We will be challenging KPMG from a parliamentary point of view.”

Last week the financial services and auditing firm announced the resignation of its Chief Executive Officer and several executives after being implicated in the Guptaleaks. 

Former Finance Minister Pravin Gordhan is currently seeking legal advice following the withdrawal of the report.

KPMG announced that the conclusions on its findings were incorrect and therefore, could not be relied on. The firm has also announced that it will repay R23 million fee it received from Sars and donate it to charity. 

It has appointed a new CEO and has promised to turnaround its leadership. 

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