Documenti di Didattica
Documenti di Professioni
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Against
WERKSMANS
Attorneys for Mr Pillay
96 Rivonia Road
The Central
11th Floor
Sandown
Sandton
Tel: 011 535 8106
Fax: 011 535 8606
E-mail:
Reference: Mr B HotzIPILL38396.1
TO:
THIS THE 23RD DAY OF APRIL
PUBLIC PROTECTOR SOUTH AFRICA 2019.
Public Protector House
Hillcrest Office Park TIME:J[•
175 Lunnon Road
Hillcrest
Pretoria
BY HAND
PUBLiC PROTECTOR OF SOUTH AFRICA
Against
AFFIDAVIT
I, the undersigned
I The contents of this affidavit are, unless the context indicates otherwise,
within my personal knowledge and are, to the best of my belief, true and
correct.
the Public Protector Act, 23 of 1994 ("the Public Protector Act"). A copy of the
PREUMINARY MATTERS
4 Before I deal with the substance of the complaint of the 'Complainanr', stated
matters below.
affidavit to the Public Protector at 12h00 on 23 April 2019. I have been further
paragraph 7 belot'V'.
the vagueness with which the allegations are cast — that not only do they
cover a lengthy period of time but also that they refer to events that, in the
10 April 2019 and 23 April 2019 contains only six business days.
8.1 The file reference number reflected on the subpoena indicates that the
affidavit from me with such unseemly urgency given that the complaint
has in the first place been the subject of investigation by the Public
Protector since last year and, second, relates to allegations that have
'provide an
8.2 It is specifically demanded of me that I must, in my affidavit,
which may be in [my] possession and/or under [my] control which may
days.
4
8.4 I shall deal later in this affidavit with the fact that a number of the
9 I place on record that I regard the timing of the subpoena as being an affront
10 I wish to point out that variations of certain of the allegations contained in the
forums over the past 10 years. Allegations have been made, from time to
12 The complaint is made against the South African Revenue Service ('SARS"). I
and I held various senior positions within SARS over the period covered by
13
14 Moreover:
was
Furthermore, in the course of my employment with SARS
I
14.2
"B", a specimen of the form of the Oath of Secrecy that I would have
follows:
respectively; and
procedures."
documents that are already in the public domain and documents which I have
disclose to the Public Protector in order to put paid to certain of the allegations
16 I have been charged with the commission of certain alleged offences, which
charges remain pending against me. Whilst the charges are wholly unfounded
and vexatious, they remain hanging over my head. In respect of the matters
that I have been charged with I have the rights set out in section 35 of the
Constitution.
17 I
attach, marked "C", a copy of the indictment that was served on me. It is
plain that the allegations set out in paragraphs 7.1.3 to 7.1.8 of the complaint
to the Public Protector are either directly or indirectly related to the charges
18 In the circumstances, and save to the extent that I wish to provide the Public
Protector with information that plainly demonstrates the fatally flawed nature
The Public Protector has previously dealt with various matters covered by the
present complaint
19 During August 2014, when I was the Acting Commissioner of SARS, the
a complaint had been made to her office that SARS had established an
civilians, politicians and prominent businessmen for possible tax evasion. The
Public Protector informed SARS that she had elected not to investigate these
allegations and set out her reasons for making that decision.
part of SARS or its officials, this was and remains denied by me.
The Public Protector went on to inform SARS that her investigation would, in
21
Group officials and two other issues which are presently irrelevant. The Public
Protector sought pertinent details and responses from SARS regarding the
employees.
23 Upon receipt of that response the Public Protector informed SARS that she
would consider the response and she would revert should the need arise.
There was no further communication from the Public Protector in this regard.
It is accordingly clear that the Public Protector was satisfied with the
but it will be found in the Public Protector's own records as well as the records
of SARS.
demonstrate that:
25 I draw this to the attention of the Public Protector in order to
25.1 The Public Protector has already determined that the allegations now
subpoena fall outside the remit and competency of the office of the
regard.
been concluded. The Public Protector is, similarly, functus officio in this
regard
10
Absence of circumstances
more than two years prior to being reported to her. I reiterate that the events
to which the allegations pertain span a period of between ten and twenty
years ago.
27 I
respectfully submit that none of the circumstances disclosed by the Public
contemplated in section 6(9) of the Public Protector Act and the purported
28 I now deal with paragraphs 7.1.1 to 7.1.12 as set out in the subpoena to the
29 Ad paragraph 7.1.1
29.1 I was the Acting Commissioner for SARS for the period July 2013 to
23 September 2014.
11
I was not in the employ of SARS at that time and I could not have
29.4
about April 2002. The Commissioner for SARS at that time was
29.7 Mr Pikie resigned from SARS in or about August 2010 and was again
Mr Pikie.
29.10 I have been advised that the records relating to employees of SARS fall
possession of SARS.
30 Ad paragraph 7.1.2
30.1 This allegation is one of those allegations that are ever changing in
their nature.
30.2 I am aware that various and varying allegations have been made about
received cash deposits paid directly into his personal First National
made previously.
13
Loggerenberg.
organisations.
30.8 I am advised that the records relating to employees of SARS fall within
SARS.
precise subject of one of the charges that I presently face. Whilst there
rights in the face of the Public Protector's demand. I have been advised
31.4 I
wish, moreover, to state that the allegations in paragraphs 7.1.3,
7.1.4, 71.5 and 7.1.6 are entirely devoid of merit. I shall demonstrate
31.5 I note that the allegation in paragraph 71.3 does not identify the
SARS Special Projects Unit, which was later renamed the National
/
15
This unit was the unit referred to in the "report compiled by Advocate
report".
31.7 The Sikhakhane Panel report is fatally flawed in fact and law as
recorded in:
September 2014.
Agency in 2007.
recommend."
31.7.9 The final report of the Commission where the following was
a
17
AdvNxumalo..."
and also
4
18
June 2015) that the "unit was unlawfully established' as put forth
31.8 I have been advised that certain of the documents that I have referred
to in paragraph 31.7 above, fall within the ambit of Chapter 6 of the Tax
SARS.
31.9 However, public records exist that set out in detail the legality of the
unit, its establishment, mandate and that its existence has been public
knowledge for years and explained in detail, I refer inter a/ia to:
marked "F".
19
2010 to 2014.
31.9.6 A best-selling book, entitled "Killing for Pro fit: Exposing the
Illegal Rhino Horn Trade" in the chapter "Juju and the Poacher"
31.10 With particular reference to the allegation in paragraph 7.1.5 that SARS
Intelligence Agency;
1999 to 2009;
1999 to 2009;
21
31.10.4 These incidents were raised formally by SARS with the then
I
National Intelligence Agency, and later the State Security
22
31.10.5 Records relevant to the above can be obtained from the State
Inspector-General of Intelligence.
31.11 With particular reference to the allegation in paragraph 7.1.6 that SARS
31.11.4 The unit that I have mentioned did not procure or utilise the listed
31.11.6 The records relating to operations of SARS fall within the ambit
32 Ad paragraph 7.1.7
corn plaint'.
satisfied with
32.2 To the best of my knowledge, the Public Protector was
32.3 The Public Protector is invited to inspect her own records in this regard.
33 Ad paragraph 7.t9
33.1 SARS certainly did not act on the instructions of Mr Gordhan, as the
SARS which raised well founded suspicions that Mr Malema was not
33.2 During October 2012 the Public Protector published a report entitled
Due to the fact that the awarding of the contract to On-Point was
targeted by SARS because of his open and public support for the then
public
33.4 SARS dealt with Mr Malema's allegations openly by issuing a
processes.
the Bill of Rights. SARS seeks to apply the tax and customs laws
audit, who to settle tax debts with and who not to. Case selection
oversight mechanisms.
dealings with them. / will show that they are merely furthering a
against
33.6 In the same statement Mr Malema made several allegations
Finance. A matter Mr. Gordan took very personal and has since
then used his power/n fluence over SARS to fight his political
person. Even during his days in the UDF, Mr. Gordon belonged
with them.
meeting between the ANCYL and the ANC where Mr. Zuma tried
Gordon. Mr. Zuma also indicated that he did not know Mr.
33.7 Ultimately, however, and despite his intemperate and false allegations
"I can confirm that I was in formed by SARS today that it has
date at the time of the offer which I have done. The offer to
2011 and 2012 will follow and will include further amounts which
and which will be dealt with in the normal course of my tax affairs
liabilities.
was very frustrated with the process and I may have said
I accept the bona fides of SARS and its officials who have
dealt with the matter. / have come to realise that the tax
excuse for not paying your tax and it only leads to higher
/ hope to now put the matter behind me and focus on the future.
me)
L
32
foflows:
assessments for tax years 2011 and 2012 will follow. The
debt. The return date for confirmation of a final order was set for
26 May 2014.
information
33.10 Records relating to operations and taxpayers fall within the ambit of
34 Ad paragraph 7.1.10
believe that the appointment was proper. All SARS' checks and
34
balances and all governance measures did not produce any negative
34.2 I believe that the relevant persons at SARS who were directly involved
34.3 Records relating to operations and employees of SARS fall within the
35 Ad paragraph 7.1.11
point when in successive years, its IT costs began to reduce once the
Y
35
initial capital investments had been made, providing real value for
money. SARS had the best IT division in the South African state. It
rescued the Department of Home Affairs and the 2010 World Cup from
Home Affairs and the people of South Africa millions of Rands and
revenue in seven years through the risk engine, which was developed
35.4 Records relating to operations and employees of SARS fall within the
36 Ad paragraph 7.t12
Interfront were adhered to. All the governance structures of SARS and
36.2 Prior to 2012/13 SARS had more than thirty separate stand-alone
because of the customs system that it owned and SARS had decided
to modernize customs.
36
36.3 SARS thus became the owner of the intellectual property of tnterfront.
The Interfront customs system became the core of the new customs
36.4 A secondary intention was that the system could serve alt Southern
needing to buy their own systems. The only costs that they would be
36.5 lnterfront had a small staff complement who were experts in their field.
36.6 SARS could therefore complete the design, coding and implementation
36.7 I believe the Annual Reports and annual Auditor General of South
accessible.
36.8 Records relating to operations and employees of SARS fall within the
JONATHAN ISAKOW
COMMISSIONER OF OATHS
Ni
SJ BP•OEMA
fl PLthUC. Ac1 ui I
MR IVAN PILLAY
261 MUW(LEN STREET
MUCI<LENEIJR
PRETORA
0181
1
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cecrumstonce's idol look un 'scenunt to unrt Le my hUcraiV:n Iar,eurvhlv In
accept thin complaint, includes the nWr at 11Th complaint Ththr ft act SChOLV000L
hr the cIhrctnslkrrrc: whelber the hoomo cotild syslon'Lr. protkf me in: slate
O'hare I would tao able 10 insestetdto the rr,uitrr
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requeol foruUonsirai Fr oulrrilit or tre 010-0
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ni )l;t; r;;Iinrnl ;txncth'n; d''C tlttn', '1 t''u' . ''t U F:; ;4;trt,tl H
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5 5
D
African
Revenue Service
South African Revenue Service OATH I AFFIRMATION OF SECRECY
Inkomstediens Version: 09/2012
Uphiko Iwezimali Ezingenayo eNingizimu Afrika
Tirelomatlotlo ya
Signature
(Must be signed in the presence of a Justice of the Peace, Magistrate or Commissioner of Oaths)
Date Place
1. I certify that prior to my administering the prescribed oath/affirmation*, put the following questions to the deponent and wrote down his/her answers
I
(b) Do you have any objection to taking the prescribed oath/affirmation? Answer
(c) Do you regard the prescribed oath/affirmation as binding on your conscience? Answer
2. I certify that the deponent acknowledges that he/she*knows and understands the contents of this statement which was sworn to/affirmed*and signed by
the deponent in my presence.
Signed: Jusfice of the Peace/Magistrate/Commissioner of Oaths*
Designation / Rank
Date Place
* Delete whichever is not applicable
V VV
The Acting Special Director of Public Prosecutions, Priority Crimes Litigation Unit,
who prosecutes for and on behalf of the State, throughout the country, hereby informs
VISVANATHAN PILLAY
a sixty four (64) year old male residing at 261 Muckleneuk Street Nieuw
Muckleneuk, Pretoria in the district of Pretoria;
a fifty three (53) adult male residing at Weltevrede farm, 3reèrivier, Worcester
in the district of Worcester.
a forty nine (49) year old male residing at 6 Peckan Place, road,
Pretoria in the district of Pretoria,
ALTERNATIVE TO COUNT 2
2
P
WHEREAS
And whereas
South
Section 3 of the SARS Act determines the mandate and objectives of the
African Revenue services (SARS) as the efficient and effective:-
And whereas
The long title of the SARS Act states that the purpose of the Act is to provide for
the efficient and effective administration of revenue collecting system of the
Rep ubi Ic.
And whereas
3
(1) to achieve its objectives SARS must:-
(a) secure the efficient and effective, and widest possible, enforcement of
(2) SARS must perform its function in the most cost-efficient and effective manner
in accordance with the values and principles mentioned in section 195 of the
Constitution.
And whereas
4
And whereas
and maintained
(a) a high standard of professional ethics must be promoted
(c)
(d)
(e)
practices to
(h) good human resource management and career development
maximize human potential , must be cultivated
(i)
5
And whereas
Section 199 of the Constitution establishes the structure and conduct of security
(1) the security services of the Republic consist of a single defense force, single
police service and any intelligence services established in terms of the
Constitution
(2) the defense force is the only military force in the Republic
(3) other than the security services established in terms of the Constitution,
armed organisations or services may be established only in terms of national
legislation
(5)the security services must act, and must teach and require their members to
act, in accordance with the Constitution and the law, including customary
international law and international agreements binding on the Republic
(6) no member of any security service may obey a manifestly illegal order
(7) neither the security forces nor any of their members, may in the
performance of their
6
manner determined by national legislation or the rules and orders of
parliament.
And whereas.
(herein referred
Section 1 of the National Strategic Intelligence Act 39 of 1994
to as the NSI Act) established National Intelligence Structures as:-
And
section 3(1) of
defines the Agency as the State Security Agency as referred to in
not mentioned as one of the
the Intelligence Services Act 65 of 2002, SARS is
only
National intelligence Structure established in terms of the NS1 Act and can
work with other law enforcement agencies within the principle of
government in achieving its objectives as outlined in section 4 and 5 of the SARS
Act
And whereas
Security Agency
Section 2(1) of the NSI Act provides for the functions of the State
as being to:-
7
(b)fulfil the national counter-intelligence responsibilities.., and to co-ordinate
counter-intelligence and to gather, correlate, evaluate, analyse and interpret
information regarding counter-intelligence.
And section 2(2) (f) enjoins tlte State Security Agency to co-operate with any
organization in the Republic or elsewhere to achieve its objective.
And whereas
Section 3 of the NSI Act provides for the functions of other department of State,
with reference to national security intelligence.
shall not gather departmental intelligence within the Republic in a covert manner.
8
And whereas
And whereas
National Intelligence Agency)
Approval to fund a special capability within NIA (the
to address
to supply SAPS and law enforcement with the necessary
Minister of Finance on 22
the illicit economy was sought and obtained from the
include the importation of
February 2007. IllIcit economy is understood to
smuggling of cigarettes
counterfeit goods, the illegal harvesting of abalone, the
recognized that it lacked the
and the importation and exportation of drugs. SARS
and to partake in
capability incLuding the legislative mandate to manage
created within NIA to focus
clandestine activity. This special capability was being
on SARS work, SARS informed the Minister
of Finance in February 2007 that
Agency to supplement
discussions were taking place with the National Intelligence
arrangement into, a
SARS intelligence capability with a view to formalize the
9
memorandum of understanding, yet took no steps to even make contact with NIA,
nor was there a memorandum of understanding concluded.
.
assessment of the members of the Unit commenced around June 2006 without
any involvement of NIA, Most of the members of the unit commenced their
employment 1 March 2007. The Special. Project Unit forms part of the
Enforcement and Risk Division and both accused 2 and 3 reported to Accused I
And whereas
And whereas
Section 1 of POCA
(b) any donation gift, loan, fee, reward,.... or any other similar advantage;
10
L
(c).
(d).
(e).
(f)
description
(g)Any other service or favour or advantage of any
(h)
(I)
discount,
(j) Any valuable consideration or benefit of any kind, Including any
commission rebate, bonus deduction or percentage.
Arid whereas
of the
Accused I and 2 did not secure an interception direction from the office
Act, they authorized
designated judge In terms of sections 16, 17 or 18 of the RICA
Research Group of SARS to
members of the Special Projects Unit and or National
Directorate of Special
install surveiBance equipment at the offices of the erstwhile
(NFA) and to intercept
Operation (DSO) and the National Prosecution Authority
thereby made
communication within the NPA in contravention of the RICA Act and
hereunder. Conversations amongst
themselves guilty of offences mentioned
November 2007 were
members of the DSO during the period 3 October to 6
from the designated
monitored, recorded and transcribed without an authorization
recorded conversations
judge issued in terms of the RICA Act 70 of 2002. The
Accused I and 2 at their
amongst members of the DSO were handed to both
insistence.
11
/
And whereas
that was used to
Accused 3 knew, when he managed the HRIU that the process
members of the DSO was
procure the transcripts of the conversation amongst
witness 13, an employee
unlawfuL Accused 3, together with Accused 'I authorized
approximately One Hundred thousand rands
of SARS, to retain an amount of
equipment was fitted, for
(Rl00 000 .00) which remained after the surveillance
not due to him.
himself thereby giving him unauthorised gratification which was
12
Contravention of Sections 10 (b) read with Sections 1, 2, 24, 25, 26(1) of
Activities (POCA) Act 12 of 2004
the Prevention & Combating of Corrupt
(Unauthoriseci Gratification by a party to an Employment Relationship)
AGAINST ACCUSED I AND 3 ONLY
ALTERNATIVE TO COUNT 2
ONLY
13
Accused I and 3, directly or indirectly and unlawfully gave or agreed to give Mr
Lombard gratification, to wit cash in the amount of approximately one hundred
thousand rands (RI00 000, 00) whether for the benefit of himself or for the
benefit of another person, to act in a manner that amounts to the illegal,
dishonest, unauthorized, incomplete, or biased exercise, carrying out or
performance of any powers, duties or functions arising out of a constitutional,
statutory, contractual or any other obligation, designed to achieve an
unjustified result; or that amounts to any other unauthorized or improper
inducement to do or not to do anything
In the event of a conviction, the said Acting Special Director of Public Prosecutions
requests that the accused be sentenced in accordance the law.
ADV J P Sc
ACTING SPECIAL DIRECTOR OF PUBLIC PROSECUTIONS
PRIORITY CRIMES LITIGATION UNIT
(:) DATE:
14
1gNGDIVISIQNIPRETPRIA).
THE STATE
VERS
IVAN AND TWQ
QF
ACT
15
of Finance signed his
Moleketi on 22 February 2007, The then Minister
approval to the request on 22 February 2007.
•16
intercepted without the interception direction issued by the designated judge
amongst members of
in terms of the RICA Act 70 of 2002. ConversationS
monitored,
the DSO during the period 3 October to 6 November 2007 were
the designated judge
recorded and transcribed without an authorization from
recorded conversations
issued in terms of the RICA Act 70 of 2002. These
amongst members of the DSO were handed to both Accused I and 2 at
their insistence Accused I even gave witness 13 an assurance that if these
interceptions were discovered, he will take full
responsibility for having given
members involved legal
the necessary authorisationS and guaranteed the
assistance that will arise therefrom.
17
OF ACT
IJST OF
7, Mr Laurence Smith
4 Dion Road
Sandown Extention 18
Johannesburg
18
Sandown
Johannesburg
19
17 Mr Michael Peega
Soweto
20
SARS
Pretoria
21
Westlake Avenue
Weaving Park
Pretoria
22
40. Mr Andrew Leask
Pretoria
23
D
Monday, 22 April 20 1922/04/19
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Submission from Adrian Lackay, former South African Revenue Service spokesperson, to Yunus Carrim,
Chairperson of the Standing Committee on Intelligence and Cornelia September, Chairperson of the Joint
Standing Committee on Intelligence, March 25 2015
24 March 2015
The Honourable Mr Vunus Carrim
Chairperson of: the Standing Committee on Finance
Per e-mail;
Dear Madam/Sir
RE: Proceedings in relation to events at the SOUTH AFRICAN REVENUE SERVICE (SARS)
introduction
1. As you may be aware I was employed by SARS for a period of 11 years, until my resignation on 19 February
2015 with last working day being 19 March 2015. I served SARS with an unblemished record and received
recognition for outstanding performance from SARS every year. I am addressing this letter within the context of my
employment at SARS as the official media liaison and spokesperson, and for the specific-period since September
20 14, which coincides with the appointment of Mr Tom Moyane ('the Commissioner')
1.1. During the latter part of 2014 I was caused by the Commissioner to issue statements to the media and it became
apparent to me at a later stage that such public statements contained false and incorrect information;
1.2. My role as spokesperson, in particular with aspects contained herein, was diluted and eventually withdrawn in
part by SARS and my duties were referred to the SARS Executive: Mr. Luther Lebelo and other colleagues
1.3. Key facts which I was in possession of or came to be aware of during the course of my time at SARS that relate
to the matters at hand were being ignored deliberately , adapted to advance a particular narrative and which were
used as basis to effectively muzzle, frustrate, victimize and suspend key officials in SARS;
1.4. As the spokesperson for SARS I was effectively muzzled by SARS and the Commissioner and thereby unable
to ensure that the public was aware of critical factors regarding the ongoings at SARS;
1,5. I resigned from SARS under duress and because it became untenable for me to associate myself with the
ongoing matters at SARS, I have commenced instituting labour proceedings against SARS on the basis that Iwas
constructively dismissed
2. I have reason to believe that the Commissioner of SARS, Mr Tom Moyane ('the Commissioner'), will be
addressing the Standing Committee on Finance ("SCOF") and the Joint Standing Committee on Intelligence
("JSCI") in the coming days on the events that have recently occurred in that institution and related investigations. It
is my view that it is in the interest of the SCOF and JSCI, in the interest ofjustice and ultimately in the public
interest, that -
2.1. a true version of such events are also placed before the SCOF and JSCI and its members, albe/t in writing and
not in person; and
2.2. the SCOF and JCSI should be apprised of what Ibelieve to be at the heart of the ongoing matters at SARS,
3. 1 would be failing in my duty as a citizen if I did not ensure that the SCOF and the JSCI and its members are
completely apprised of the facts of the matter, and in that regard I am willing to make whatever evidence I have in
my possession available to the SCOF and JSCI, at request.
4. This version of events I place before the SCOF and JSCI, without prejudice to my rights, for the sole purpose of
assisting the SCOF and the JSCI to obtain a balanced and comprehensive understanding of the facts at my disposal.
5. Since September 2014, certain SARS officials and certain role-players in the media have been advancing a
particular narrative which I submit is false and contrived:
5.1.1. 1 submit that facts to my kl1ow!edge suggest the units, (there were three permutations of the units over time)
were formal SARS units and set up, managed and functioned in a manner no different from any other unit, The only
distinction between these units and others investigative units in SARS was that members were given leeway to work
from home and their activities wei'e kept discreet in order to ensure operational security, and the safety of the
respective officials and families over time;
5.2, 'That SARS had been denying the existence of this unit,"
5,2,1. 1 submit that in 2010 1 was principally involved in briefing various media houses on the existence of the unit
in its forni as it was then, that its existence was never denied and that the media was completely briefed on its
purpose;
5.3. "That these units over time were supposedly involved in spying on Mr. Jacob Zuma prior to him becoming
President of South Africa, infiltrated politicians as bodyguards, had sophisticated equipment used to intercept
communications and so forth,'
5,3.1. 1 deal with these later herein. To my knowledge all these allegations have their origins in a little truth and
much fiction,
6. It is my belief that any past attempt by any person within SARS to have countered this narrative, were muzzled,
bullied, threatened, suspended, and their tenure at SARS made unbearable. In some cases persons left SARS's
employ , I believe that even now persons are being and will continue to be victimized and bullied for wanting to out
the truth, sometimes at great cost to SARS by way of legal threats, Ultimately the taxpayer has to foot the bill for
this.
7. It is further my belief that the "narrative" advanced by SARS and others in the media deliberately conflates
certain issues, confuses or misrepresent material facts and embroiders significantly on a unit which was at best 27
officials strong at its height, and ended as 6 officials, and effectively capitalizes on the ignorance or lack of insight
and understanding of the complex environment of how SARS used to function. The operations of these units were
miniscule in comparison to the balance of operations in SARS in terms of number and scope. The amount of public
attention and gravitas allocated to the operations of the unit over time, is inordinate.
7.1. By way of example, SARS now advances that certain "spy equipment" belonged to or were "available" to the
unit whereas this is not the case. The truth of the matter, to my knowledge, is that such equipment which is
commercially available, were acquired by a totally different division within SARS, tasked to investigate internal
corruption and had nothing to do with the units in question. They were at all material times in separate divisions,
had separate cost centres and management.
8. What I relate here is based on my personal knowledge of facts I came to be aware of over time,
9. In September 2014, soon after his arrival at SARS, the Commissioner disbanded the entire EXCO of SARS.
Primarily his decision was based on what he stated formally to be news articles in the Sunday Times and leaks to the
media;
10, Suspended Deputy-Commissioner Ivan Pillay, Group Executive Peter Richer, Group Executive Johann van
Loggerenberg on effectively the "narrative" referred to and stated so publicly in the Labour Court under oath, in
internal communications to SARS staff and in at least one statement to the media. The findings of the "Sikhakhane
Panel" were also advanced as reasons for the suspensions . Despite the Labour Court finding that the Panel's report
made no adverse finding against any third party, the Commissioner and SARS have continued to advance this
narrative and acted against numerous SARS officials including the suspended Deputy Commissioner, at significant
financial cost to SARS, To date SARS has already had to concede and pay legal fees and other costs in three legal
proceedings against officials it had suspended.
11. Advanced publicly on Radio 702 in January 2015 that the so-called 'rogue unit" still existed at a time when the
SARS Commissioner had already closed down the High-risk Investigations Unit comprising of a mere 6 officials
who previously worked within the National Research Group and the Special Operations Unit. These investigative
units were the subjects of various investigations over time;
Sequence of events
12. Certain key officials in SARS appear to have reached a stage, since September 2014, where they took the
personal decision to resign from SARS, including Messrs. Barry Hore, Jerome Frey, Jacques Meyer, Johann van
Loggerenberg, and Clifford Collings and of late there are more senior personnel that have tendered their
resignations.
13. I wish to set out a limited narration to the sequence of events as I see it based on what I know:
13. 1. The primary protagonist who triggered off this saga in May 2014 was Ms Beinda Walter. In my view her
attack on Mr. Johann van Loggerenberg was based on a number of reasons but appears to have been based on her
emotional disappointment of a failed relationship at the time, the failure of her attempt to blackmail him and a fear
of the consequences of her financial affairs, and the existence of the data and evidence of her wrongdoing in his
possession.
13,2, In essence, her initial allegations were rather basic and undeveloped, and was aimed at insulting his person and
his fitness of office. Her narrative developed in time as she came to overlap with other persons and other interests,
and she adapted her approach accordingly, to eventually focus around a so-called "rogue unit", a charity van
Loggerenberg is a director of and now lately his qualifications.
13.3, She also started engaging the media - most notably a particular journalist with whom she shares a specific
history, Mr Malcolm Rees. To my knowledge the data extracted from her celiphones demonstrates that Ms Walter
had, at a time before he even knew of her existence, in conjunction with her erstwhile client "Carnilinx", sought to
advance stories to Malcolm Rees, and which suggested some kind of impropriety in respect of the business
associations of a Mi' Edward Zuma and a Pietermaritzburg-based tobacco manufacturer. This email sets out quite
clearly what was intended by Ms Walter at the time,1
13.4. I believe that what Ms Walter was completely unaware of, but very quickly adapted and utilized to her
advantage, was the acrimony that had already existed between Mr. Johann van Loggerenberg in his official capacity
and certain officials in other state agencies (moi'e especially the Anti-Illicit Tobacco Task Team referred to) who in
his view had busied themselves wittingly or unwittingly with advancing commercial interests of businesses,
participating in illegal tracking, allowing smuggling to occur undei' guise of investigations, duping state agencies
into believing cei'tain "intelligence reports", to name a few. Mr Johann Van Loggerenberg was outspoken about his
views on this towai'ds me ad other SARS officials,
13.5. I believe that it certainly "helped" that they were known to her from a period before she and Mi' Johann van
Loggerenberg had met, For example, Hawks Brigadiei' Casper Jonker who headed the Anti-Illicit Tobacco Task
Team, It was Brigadier Jonker who took Ms Walter's affidavit for the purposes of her "complaint" to the Hawks and
used it as reason why she did not want to testify under oath to the SARS "Khanyane Panel,"
13,6, A further example would be former Colonel Hennie Niemman, who was part of the same Tobacco Task Team,
and a member of the police Crime Intelligence Division, and has recently left the police. He had ali'eady started to
engage private persons as early as April 2014, prior to Ms Walter's complaint to SARS to seek "dirt" on Mr. Johann
van Loggerenberg. This mattei' was reported by Mi'. Johann van Loggerenbei'g via SARS to General Dramat of the
Hawks at the time,
13,7, It is this same Colonel Niemman who collaborated with Ms Walter and Mr Peega in a television broadcast on
Carte Blanche on 22 Februai'y 2015 about the alleged "SARS rogue unit" and made untrue and slanderous
allegations against Mr. Johann van Loggerenbei'g and others,
13,8. I believe that these persons functioned in tandem with Ms Walter and the second set of protagonists with the
sole purpose of ridding SARS of persons they were opposed to, I believe that their efforts had been unsuccessful for
some years, and finally came to fruition when the circumstances presented themselves for the proverbial "perfect
storm
13,9, I believe that it was virtually within a few days after the initial complaint that a fourth set of protagonists
capitalized on the situation . I believe that these persons hail from within the institution and have had axes to grind
with mainly Mr. Ivan Pillay, Mr. Pete Richer and Mr. Johann van Loggerenberg and others affected for a variety of
reasons. I believe that it very quickly became a case of "my enemy's enemy is my friend" and in a rather short space
of time, people who would never have associated themselves with each other from any perspective, began to
advance each other's agendas.
13.10. I believe that a fifth set of protagonists also capitalized on the "opportunity" created; consisting of persons
who were formerly employed at the institution, but left under a cloud or were dismissed and/or are facing criminal
charges. I believe that their efforts had been going on for some time and only served to bolster what the other groups
were up to, I believe that former SARS official and NRG-member, Mr Michael Peega falls within this category , He
was dismissed during 2009 for his involvement in rhino-poaching in a joint action between the South African Police
Service ("SAPS") and South African National Parks on Christmas Day whilst on leave,
13.10,1, He was the original author of a so-called "intelligence dossier" in 2010 which was advanced by politician,
Mr Julius Malema, and was given significant niedia coverage. SARS had submitted a line-by-line refutation of this
"dossier" at the time to the SSA, SAPS; the President of South Africa and various media outlets over that period;2
13,11. I believe that the by-product of this sequence of affairs is that there are now multiple agendas, being
advanced by multiple groupings in different ways, sometimes in tandem or concert, sometimes not, sometimes
individually so and sometimes in collusion. The lack of reaching a conclusion on the true facts has harmed and
continues to harm SARS as an institution, its public credibility and ultimately the fiscal prospects of the country.
13,12. Multiple "camps" appear to have formed, some apparently supporting the suspended SARS officials, some
supporting new management at SARS, some advancing individualistic agendas, some advancing agendas against
new management at SARS, political or ideological motives are beginning to feature and new "facts" which are
partly based on truth but again mixed with fiction are being leaked to various media outlets.
13,13. These media leaks have now developed to suggest some or other nefarious political motives byvarious
political persona in the political landscape.
13.14. Regular and known "information peddlers" have now also jumped on this situation and are beginning to
advance their own motives.
The relationship between former SARS-official Johann van Loggerenberg and Ms Belinda Walter
14. Much of the narrative in this matter was triggered by the involvement of a Ms Belinda Walter ('Ms Walter'),
who was the chairperson of a body representing small tobacco manufacturers (Fair Trade Independent Tobacco
Association - "FITA"), and who has repeatedly confessed that she was at all material times an informant of the State
Security Agency ("SSA") and her romantic relationship with former SARS-official and Group Executive of
Investigations, Mr. Johann van Loggerenberg. She has also from time to time declared publicly that she had on
behalf of the SSA spied on the tobacco manufacturers, for a fee,
15. It has been suggested by the "Sikhakhane Panel", and in various media reports (print and radio) her that
relationship with the SSA ended in 2012. This assertion is incorrect since, to my knowledge, her relationship with
the SSA only terminated at the end of 2013. In fact, Ms Walter, according to her own account of events, acted on
instruction of the SSA or one of its officials as late as 2 September 2013, and utilized a surreptitious recording-
device belonging to the SSA for that purpose. Mr. Johann van Loggerenberg made these facts available to SARS
and various persons in SARS over time,
16. Mr. Johann van Loggerenberg submitted a detailed affidavit with far greater detail than what will be reflected
herein, with supporting and substantiating evidence as annexures, to SARS and the Sikhakhane Panel, From Mi' Van
Loggerenberg's affidavit, the following is apparent-
17. On 2 September 2013, Ms Walter met Mr. Johann van Loggerenberg in his official capacity for the first time.
This was preceded by an unrelated complaint concerning tobacco-matters submitted to Acting Commissioner Mt
Ivan Pillay and some e-mail exchanges which ultimately led to Mr. Johann van Loggerenberg suggest ing an
informal interaction. Mr. Johann van Loggerenberg met with her on his own as he was entitled to in terms of the
Customs & Excise Act which specifically provides that an official may engage individually with any person in
matters concerning Customs and Excise,
18, At the time Mr. Johann van Loggerenberg had no knowledge of Ms Walter other than that she was the
chairperson of FITA, and the discussion between them was of a general nature intended (at least from his
perspective) to seek ways to ensure compliance with the FITA members' statutory tax obligations.
19. Nothing ultimately transpired from this meeting insofar as SARS was concerned. Approximately two months
later on 25 October 2013, Ms Walter invited Mr. Johann van Loggerenberg out on a date, They met at a restaurant,
after hours that following weekend, and were joined by two of Mr Van Loggerenberg's friends. Ms Walter and Mr
Van Loggerenberg commenced what could for all purposes be considered a romantic relationship from that date (i.e.
November 2013) onwards.
20. As events began to unfold within the context of a romantic relationship, Ms. Walter subsequently confirmed that
in the meeting with MrVan Loggerenberg that on 2 September 2013, she wore a concealed recording device
provided to her by her SSA handler, Mr Chris Burger, in the belief that Mr Van Loggerenberg was corrupt3
21, During this relationship, which lasted at best 5 and a half months, various issues arose between them, some of
which included his concerns about the impact of their relationship on his professional duties and obligations to
SARS. By way of example -
21.1. at the commencement of their relationship in November 2013, Mr. Johann van Loggerenberg enquired about
Ms Walter's tax status, and when it became obvious that she was not tax compliant, and in light of the sensitivities
associated with her being a paid informant of the SSA, they agreed that she would submit herself to a tax audit in
order to regularize her affairs, and to protect her status as an SSA informant. This audit was arranged by Mr. Johann
van Loggerenberg to be undertaken by another senior manager and was intended to be finally signed off by Mi'
Gene Ravele, the Chief Officer at SARS .4
At various times during the relationship Ms Walter sought private advice from Mr. Johann van Loggerenberg in this
regard, and she discussed aspects of hei' income and sought assistance from him from time to time. Ms Walter did
not at any stage express any concern or objection to the manner in which the SARS audit was being conducted, and
she was in fact quite complimentary about the auditor with whom she interacted at the time.
However, at the demise of their relationship, this suddenly became an issue. At various times, Ms Walter expressed
open acknowledgement of her tax issues, and her willingness to settle them and to do so properly regardless of the
consequences . Mr. Johann van Loggerenberg was not involved in the audit at a115
21.2. On another occasion early in November 2013, Ms Walter informed Mr. Johann van Loggerenberg that she had
disclosed their relationship to one of her tobacco manufacture clients, and that the client had encouraged her
relationship with him. Mr. Johann van Loggerenberg was not aware, at that stage that Ms Walter had been acting for
a tobacco manufacturer in litigation against SARS, Given that tobacco manufacturers were under close scrutiny by
SARS, Mr. Johann van Loggerenberg informed Ms Walter that her representation of the tobacco manufacturer was
problematic and that she had to make a choice about her professional relationship with the client or her personal
relationship with him. She chose the latter7;
22. On yet another occasion he i'aised with her his discomfort and the potential conflict between her role as
chairperson of FITA on the one hand, and his role as a senior employee of SARS who was involved in addressing
compliance issues of such manufacturers on the other hand. At the time, she informed Mr. Johann van Loggerenberg
that she anticipated that someone else would be elected as chaii'person of that organization , and that her role therein
would come to a natural end in November 2013, Contrary to her assertion in this regard, she was re-elected as
chairperson of FITA, and upon receipt of such information, he immediately (on the same day) informed her that she
would have to make a decision about their relationship. At that point, Ms Walter resigned from the organization8
and from her role as an SSA informant9.
23, Mr. Johann van Loggerenberg ended his personal relationship with Ms Walter on 13 May 2014 10 for a variety
of reasons, including the fact that she had not been entirely honest with him about the activities that she had been
involved in prior to the commencement of their relationship, and in respect of which he had developed serious
reservations, For example -
23.1. In documentation seen by me, Ms Walter informed Mr. Johann van Loggerenberg that whilst she was a paid
informant of the SSA, and with the knowledge of her respective SSA "handlers", she was also a paid informant for
British American Tobacco UK Pie ("BAT UK"). She informed him on several occasions that this came about as a
result of an introduction by her SSA handlers to BAT UK, and that BAT UK and the SSA and Crime Intelligence of
the police were aware of this "arrangement". Ms Walter also provided him with:
a) a copy of the correspondence between BAT UK and British American Tobacco SA confirming such payments; b)
two recordings of discussions that she had with a BAT UK "handler" privately and in which reference is made to the
respective state agencies who were aware of this "relationship"; and c) photos of 2 Travelex cards which were
utilized by her and BAT UK to receive payment for services rendered, and which were not in her name. She utilized
such cards to withdraw payments made by BAT UK in the United Kingdom at respective ATM's in South Africa
from time to time .11;
23.2. on various occasions during his tenure at SARS 12 Mr. Johann van Loggerenberg recorded his concerns about
the independence of a so-called multi-agency Tobacco Task Team headed by a Brigadier Casper Jonker of the
Hawks, [as he was aware of the close relationship between the Tobacco Task Team and certain private investigative
firms funded by large tobacco manufacturers]. who in his view exerted inordinate influence over the Tobacco Task
Team. According to him, this was unethical and to the disadvantage of the smaller traders in the industry. The fact
that Ms Walter informed him that her SSA handlers (Mr. Ferdi Fryer and later Mr. Chris Burger) were part of this
team concerned him greatly. Perhaps more importantly, he was extremely worried about Ms Walter's involvement in
these activities in light of the fact that it raised issues about her ethical duties as an attorney of the High Court;
23,3. she was caught accessing messages and c-mails on Mr. Johann van Loggerenberg's celiphone without his
permission on at least 3 occasions , When he confronted her about this on the third occasion which occurred on 31
January 2014, she retorted the very next day (1 February 2014), by making unfounded accusations against him - to
her former client "Carnilinx", senior counsel and the media - that were not only untrue but also defamatory of him.
After making such accusations and realizing the folly of her ways', she sent an e-mail to the relevant persons in
which she retracted her accusations against Van Loggerenberg, in the following sweeping terms:
"I am writing to you as colleagues to sincerely apologise for, and explain my inexcusable conduct yesterday
I had hoped that by exposing myself and explaining about the BAT relationship, it would allay Camilinx 'fears that I
have never and would never pose any threat to them and that my son would never be in danger.
What I said about Johann van Loggerenberg, was untrue and devoid of any truth. Johann conducts himself in such a
manner as to always be beyond reproach. Mr Cassim mentioned that too and it is so, He simply does not and will
not cross the lines that Cam ilinx so desperately hopes he has. He is not like the industry or its participants,
including me. Jam deeply ashamed of what I said.
My conduct was reprehensible and inexcusable and I can only offer my apologies and brief explanation as to what
had transpired and brought me to your office in the extreme emotional state that I was in.
1 am aware that I will need to extend an to Johann and I will endeavour to do so without reference to the
participants at the meeting or the exact context to ensure that Cam ilinx is not compromised in any manner. It is
grossly and I can only hope that you will respect the past I cannot disclose. "/3
'I
23,4. This incident, in particular, demonstrated that Ms Walter was tormented by her various contradictory roles and
that it was a very difficult road to tread in the context of her ethical duties as an attorney. These texts and the various
e-mails are available for inspection, if necessary, and were seen by me, This same incident apparently triggered
application to the High Court to interdict both her and BAT from spying on them, At various times Mr.
Johann van Loggerenberg submitted that her motives for contacting Carnilinx, were most likely founded on the
following:
23.4.1. A realisation that the regularisation of her financial affaii's will lead to dire consequences, including
revelations of her having received large sums of cash from "Carnilinx" improperlyl4;
23.4,2. Her insecurity about the relationship with Mr. Johann van Loggerenberg and her belief that he was unfaithful
to her and having improper relationships with other women
23.4.3. The information that she received from a FITA member, Mr Johan Beets, on 31 January 2014 that FITA
members distrusted her and were suspicious of her. In a whatsapp message to him on 31 January 2014 at 13h27 she
informed him that:
"He hates me. He feels betrayed. Ijust kept denying it, Said its all rubbish and they must bring proof No shit they
made on their computers. They said that evemything in the SARS letter is only stuff I knew. Beets then have me a
bunch of veiled threats that I would never be so stupid and risk mine and [her son's] safety because I know what
they would all do to me.
To some extent, Ms Walter confirmed these threats and the emotional effect thereof on her in an opposing affidavit
in the interdict application that she filed in the High Court and which is publicly available.
24. These and other issues permeated their relationship, and the fact that they had different views and many
disagreements about her ethical role in these activities, eventually destroyed the relationship, according to Mr Van
Loggerenberg.
25. It appears that in early 2014, Ms Walter approached the Sunday Times and the Mail & Guardian with a view to
address what she had expressed as a abuse of power in state agencies". This resulted in a number of media
reports concerning the relationship between BAT UK and the SSA in the tobacco industry. Van Loggerenberg
demonstrated that as part of the process, Ms Walter attempted (via a private company) to extract data from some of
her older celiphones in order to provide proof of her allegations.15 It appears, however, that she was not satisfied
with the results of the data extraction, and then asked Mr. Johann van Loggerenberg to assist her in extracting such
data. Mr. Johann van Loggerenberg asked a friend, who was a qualified data analyst, to do so, and then simply gave
her one of two memory sticks with the relevant information. Mi'. Johann van Loggerenberg retained the second
memory stick and when he eventually had the opportunity to look at the information, it was clear to him that Ms
Walter, BAT SA, BAT UK, a private investigation firm that does work foi' certain tobacco companies, police crime
intelligence informants, and former and current SSA officials were involved in a range of illegal activities which
had cost the fiscus hundreds of millions of rands. Mr Van Loggerenberg spoke openly about this at SARS and
provided information to this effect to SARS. I am aware that Mr Van Loggerenberg formally requested SARS to
either registei' criminal charges itself or give him permission to do so and he was extremely frustrated with the fact
that SARS never responded formally to him, Some examples of what have been described above include but are not
limited to:
25.1, Corruption;
25.2. Fraud against SARS, the National Prosecuting Authority, State Security Agency and the Swiss buyers of the
erstwhile London Stock Exchange company Lonhro and its South African subsidiary Rollex;
25,3. Money-laundering;
25,4, Setting up a "front company" with a view to trade in the YES-brand together with current and former SSA
officials and informants, to be partly funded by a convicted tax evader and tobacco trader under the guise of what
they termed to be "Project Robin", Their intention was to utilize their access to the SSA to fund part of the
activities
255. "Laying a paper trail" to deceive SARS on behalf of "Carnilinx";
25,6, Knowledge of an "illegal spy-ring" in Zimbabwe which was funded by a private company in South Africa, set
up by a former SARS official Mr Michael Peega and discussions that occurred between Ms Walter , the private
investigations company and a SSA official.
25.7, . A directed effort with the knowledge of certain SSA and Crime Intelligence officials to "ruin the career" of
SARS official Marietjie van Wyk who was instrumental in investigating Carnilinx . I am aware that Van
Loggerenberg compiled a detailed file on this matter and provided such to SARS.
26. . In various correspondence and affidavits under oath in the Regional Court and the High Court, Ms Walter: a)
denies that she had asked Mr. Johann van Loggerenberg to assist in downloading and extracting the data from her
cellphones; or b) insists that Mr. Johann van Loggerenberg and/or SARS intercepted her communications for a
period of 3 years 16 and c) challenged Mr. Johann van Loggerenberg to prove that she handed the cellphones to him
willingly.
27, Mr. Johann van Loggerenberg has photographs which I have seen of the cellphones, an envelope which he
claims, has Ms Walter 's handwriting with the details of access codes and passwords to a BBM "cloud" referring to a
so-called "chat group" named "Evil ink" of which Walter was a member, together with other persons in the tobacco
industry. It is obvious in my opinion, that she would not have written such details if she did not want his assistance
with the data extraction process and would not have discussed this with him in text messages. According to Van
Loggerenberg, the photos of the cellphones were taken, at the time, by his friend (the qualified data analyst) . The
photos display the serial numbers of three celiphones, the batteries, the MTN sirn-card and EMEi numbers, In a
legal notice to SARS dated 11 August 2014 in terms of section 11(4) of the Tax Administration Act, Ms Walter
gave notice of her intention to issue summons against SARS and recorded the following, which she attached to a
media statement to the South African Press Association (SAPA):
Finally, I place on record that I have at no time given ANY of my devices to Johann van Loggerenberg for
forensic evaluation for evidence and require that you provide myself and the Hawks with documentaiy proof of
these bald and false a/fe gations, such evidence would naturally include photo graphic material of the devices and my
signature making them available, date, etc."
28. . On consideration of what Mr Loggerenberg has advanced - i.e. photographs and text messages - Ms
Walter's denial is patently false, in my view. In addition to the information referred to in paragraph 18 above, the
following text messages between them, by way of example, which indicate that she had voluntarily handed over the
cellphones to him:
28,1. On 1 March 2014 at 09h38 Walter enquired from him: "Where are my phones? "He responded at 09h39:
"Sealed. Will get them in week. "A couple of seconds later Ms Walter responded:
28.2. An analysis of various cellphone text messages exchanged between them , which I have seen, confirms that
Ms Walter perused the extracted data and freely exchanged messages and discussed what she found therein.
29. Ms Walter has on many occasions suggested that he had interceher cellphones i what I believe to be an attempt
to discredit this data. As a fact, I know that she was c this belief when they met and he did not correct her belief that
SARS had sue capabilities up to a point in their relationship. I dealt with this in statements to the medi when asked
about this. It is of significance that Ms Walter never responded to this.
30. The data from het' cellphones was, on her request, physically extracted through program known as 'Cellebrite'
by a private company, and at no cost to Mi'. Johann va Loggerenberg. Physical extraction entails a bit-by-bit copy
of the entire flash memory I a mobile device and not actual live (or so-called aural) interception as alleged by tv
Walter. Experts in the field of data recovery will be able to easily identify the differenc
between physically extracted data as opposed to live (or so-called aural) intercepte data. In the absence of any expert
evidence to the contrary, Ms Walter's suggestion th; this data was not physically extracted from her celiphones or
that it constitute intercepted data, must be rejected.
31, Following the demise of their relationship, Ms Walter attempted to blackmail him asking him to "pay her
money" as a) "source" for SARS!,and when this failed, - .b) caused a complaint to be registered with SARS. It
appeal's that Ms. Walter was of th belief that Mr. Van Loggerenberg was able to obtain access to and pay
"informants" c behalf of SARS from text exchanges at the time.
32, During late July 2014 Iwas contacted by The Star, the Sunday Times and the City Fret newspapers with claims
that Mr. Van Loggerenberg was going to be "suspended an investigated for corruption." In my interactions with Mr.
Van Loggerenberg he told m that he was informed by one journalist that the "leak" originated from a persc
associated to the SSA. In preparing responses to these media enquiries, Mr Va Loggerenberg advanced that these
leaks were atti'ibuted towards persons in th tobacco-industry which SARS's view, had interests in discrediting him.
33. To my knowledge Ms Walter also decided, once again, to engage the media wil essentially the same allegations
that she had advanced and retracted previously February 2014. A Sunday Times Journalist, Malcolm Rees, pi'ior to
publishing the first of a series of articles regarding SARS and the so-called "rogue unit" left an email on the table
after meeting Mr. Johann van Loggerenberg on 8 August 2014, This email, which I have seen, indicates that Ms
Waltei"s intention was to create the inipression that Mi'. Johann van Loggerenberg was corrupt, conspired with
"organized crime figures" in the tobacco-industry and was an "apartheid spy".18
34. I point out that at this stage i.e. July/August 2014, the allegations against SARS were aimed solely at Mi'. Van
Loggerenberg and no mention was made of any supposed "rogue unit" and "illegal interceptions" of
communications at all. Such allegations had featured in the media from around 2010 when Mi' Peega, a former
SARS official had published a so-called "intelligence dossier" and which I have dealt with above. In this dossier
allegations were made of a so-called SARS "rogue unit", that the "rogue unit" had "infiltrated Fi'iends of Zuma" and
"illegally intercepted communications." SARS to my knowledge dealt with these allegations directly via the media,
the SAPS, the SSA and the Presidency at the time, The allegations being advanced by Ms. Walter were solely
suggestive that Mr. Johann van Loggerenberg was corrupt and that the romantic relationship was "ill-advised" or
"improper" in one or other way , The Sunday Tunes on 10 August 2014 referred to Mr. Johann van Loggerenberg as
"apartheid spy" first and this was penned by journalist Malcolm Rees. To my knowledge Ms Walter had prior to
knowing Mr. van Loggerenberg, a particular i'elationship with Malcolm Rees. I deal with this aspect later herein.
34.1. In September 2014 onwards multiple articles were published by the Sunday Times which began to advance
that there was a "rogue unit" that had "infiltrated politicians" and "bugged Zuma" and began to overlap what Mr.
Peega had been advancing to the media years before with what Ms. Walter began to advance about SARS, I believe
it no coincidence that Ms. Walter and Mr, Peega collaborated in a television broadcast on Carte Blanche on 22
February 2015 about the alleged "SARS rogue unit" and allegations against SARS, Mr. Johann van Loggerenbei'g
and others.
35,1, The "Khanyane Panel" investigated the original allegations made by Ms Walter,
35.1 .1. At this stage of the chronology, Ms Walter's complaints were not directed towards allegations of a "rogue
unit" in SARS, but were essentially focused on Mr. Johann van Loggerenberg, his person and that he had
supposedly "infiltrated" her and "intercepted her communications". Her complaint morphed over time as she came
to meet with and learn more from others who were advancing agendas of their own. I deal with this aspect later
herein. In time the focus of the allegations began to draw in Mr Ivan Pillay and later on Mi' Peter Richer and
ultimately Messrs Pravin Gordhan and Trevor Manuel. On a live interview on Radio 702 in January 2015, Ms
Walter specifically mentioned Mi' Gordhan, claiming that she had been given access to confidential SARS
documents depicting his signature.
35.1.2. The Khanyane Panel report consisted of two documents, being a i'eport dated 11 August 2014 nd a summary
of the findings dated 12 August 2014 (the "report" and "summary") , The Panel found that it was unable to conclude
that the evidentiary material presented by Ms Walter was credible or reliable (paragraph 18,1.2 of the report and
paragraph 6.1 of the summary) and that she refused to make a statement under oath in the form of an affidavit
despite being represented by counsel,
35.1,3. Notwithstanding this finding, the Panel recorded certain concerns regarding Van Loggerenberg.
35.1.4, These concerns were made by the Panel in circumstances where they did not afford Mr. Johann van
Loggerenberg a right of reply before reaching such conclusions , as appears from paragraphs 4 and 5 of their
summary . It has been consistently stated by Mr. Johann van Loggerenberg that had the Panel had the benefit of his
input they would not have come to certain conclusions.
35.1.5. Of great concern is that this report, which was limited to a small number of SARS officials, found its way
into the hands of the Sunday Times even befoi'e Mr. Johann van Loggerenberg had been given access to the report or
an opportunity to respond to its findings . The Sunday Times had a front page report on the matter on the very
Sunday following the Friday when the report was completed and pi'ovided to the Minister of Finance, Mi' Nhlanhla
Nene, Despite the fact that Mr. Johann van Loggei'enberg requested SARS (in particular its company secretary , Dr
Giorgio Radesich) to investigate this leak, SARS did not acknowledge his request or investigate this leak,
35,2, On 10 September 2014 the Acting Commissioner of SARS, Mr Ivan Pillay, established an external panel
chaired by Advocate Muzi Sikhakhane, assisted by an attorney and two other independent counsel in order to
investigate various issues emanating from allegations made by Ms Walter.
35.2.1. This process, much like the first one, did not give Mi'. Johann van Loggerenbei'g a i'ight of reply prior to the
finalization of the i'eport. In this regard I know that he insisted on such a right at the first appearance before the
Panel and he repeated the request at the end of the process in writing via his attorneys. Ultimately, I know as fact
that he was not afforded any right of reply to any aspect contained in the report pi'ioi. to its publication;
3 5,2,2. Mr. Johann van Loggerenberg has to date not been given access to the final report, despite several requests
to SARS for it,
35,2,3, Of great concern is that whilst this process was ongoing, information that was available to only a limited
number of SARS officials, once again found its way in the hands of the Sunday Times. In this case the Sunday Times
attributed its 'sources" to "current and former senior managers in SARS" and had access to information about the
legal fees that Mi', Johann van Loggerenberg had incurred to date and details concerning his legal advice. Mr.
Johann van Loggerenberg i'equested SARS investigate the leak of information to the Sunday Times but the request
was never answered or effected.
3 5.2.4, 1 do not know how the Sunday Times gained access to this report. On multiple occasions Deputy-
Commissioner Ivan Pillay and Mi', Johann van Loggerenberg have advanced that:
35.2,4.1. . The "Sikhakhane report" is flawed in fact and law; it contains material omissions, misrepresentations and
factual inaccuracies;
35.2,5.1. The suggestion that he failed to mention the existence of the High-risk Investigations Unit at his first
appearance before the Panel is false, The recording of the interaction between the Panel and Mi'. Johann van
Loggerenberg will pi'ove that the opposite is true. Mr. Johann van Loggerenberg gave the Panel a clear brief on the
units that fell under his management;
35,2.5.2. The assertion that he was an "apartheid spy" is not only false, but slanderous and has caused him immense
reputational damage in the media and public domain , He has served the country and government with total
dedication and his track record speaks for itself;
3 5,2.5.3, He was led to believe that the Panel's interests were focused on the allegations niade by Ms Walter (as
indicated to him by SARS). His response was, as a result thei'eof focused on such issues. In so far as the Panel had
any questions about the erstwhile Special Projects Unit, (later the National Research Group and finally the High-risk
Investigations Unit), they did not enquire about it and posed virtually no questions to him in this regard. He was
therefore unaware of their specific and pronounced interest in the Unit and more so the allegations which began to
feature in the Sunday Tunes;
35.2.5.4. All the findings and statements made by the Panel in respect of the charity that he is a director of, are to
my knowledge incorrect and no attempt was made by the Panel to engage the entity or even ascertain the most basic
assertions as finally presented in its report.
35.2.5.5. He submitted that had the second Panel offered him a right to reply, the Panel would not have come to the
conclusions that it did.
35.3. By September 2014, following the arrival at SARS of Commissioner Moyane, his disbandment of the SARS
EXCO and suspensions of Messrs Pillay, Richer and Van Loggerenberg - what in my view appears to be frivolous
actions were instituted against Messrs Barry Hore (Chief Operations Officer}, Clifford Collings (Group Executive:
Anti-Corruption and Security) and Yolisa Pikie (Executive to Deputy Commissioner Pillay). A third investigation
was then launched by SARS under the guidance of KPMG, and Advocates Mike Van As and Nadine Fourie. To my
knowledge, to date not Mr. Ivan Pillay, Mr. Pete Richer nor Mr. Johann van Loggerenberg have been engaged by
any of these persons to ascertain their versions of events and despite them offering their willingness to assist SARS
in such investigations.
36, Another relevant process that was unfolding just as the "Sikhakhane Panel" commenced, was an enquiry that
was conducted by the Inspector General of Intelligence ("IGI"). Mr. Peter Richer and Mr. Johann van Loggerenberg
prepared for and presented to the IGI on the basis what was believed the scope of their investigation was as stated in
a press release issued by the Ministry of State Security in the following terms: "In the wake of weekend newspaper
reports alleging improper conduct against persons reported to be associated with the State Security Agency, the
IVlinister of State Security IvIr David Mahlobo, MP has requested the Inspector General of Intelligence Advocate
Faith Doreen Radebe to conduct an investigation in terms of the Intelligence Services Oversight Act, Act 40 of 1994.
The investigation will seek to establish the facts and get to the bottom of the allegations made about members of the
State Security Agency . "To my knowledge, to date Ivan Pillay has never been called to provide evidence or
before the IGI.
37. I am aware that Mr. Johann van Loggerenberg presented 34 instances to the IGI that were to some extent related,
but stood alone with a basic synopsis of each one pertaining to the Intelligence Services. He identified over 60
individuals he believed should be interviewed by the IGI within this context, 20 He provided Advocate Govender of
the IGI with multiple data and evidence, including a memory stick containing whatever information and data was in
his possession. This included the data he received from Ms Walter,
Media reports
38. Multiple articles appeared in the media (initially the Sunday Times primarily) concerning allegations suggesting
inter alia that:
4
38.6. "SARS acted as bodyguards to infiltrate politicians";
38.7. "SARS was involved in the deaths of Messrs Nkadimeng and Radebe";
38,9, 'SARS rogue unit intercepted communications and had sophisticated equipment to do so";
38,12, "SARS rogue unit engaged in deals with taxpayers Wiese, King, Malema unlawfully or illegally";
38.13. "SARS rogue unit was formed, managed and utilized unlawfully and improperly"
39. To my knowledge none of these allegations or reports are true. All these articles were attributed to "insiders" i.e.
either existing "SARS officials" or "former SARS officials" and in one case an "intelligence official", Once again,
the Sunday Times was exclusively given access to documents that could only have been in the hands of few SARS
officials. In many cases the documents handed to the Sunday Tinies contained unproven and untested allegations
and were in raw format. Very few people would have had access to such information. To my knowledge SARS did
not investigate these leaks in any manner or form as would normally been the case.
40, Mr. Ivan Pillay and Mr.Johann van Loggerenberg have repeatedly informed SARS that:
40.1, The manner in which the original Special Projects Unit came about is well recorded in SARS, was approved at
Ministerial level, approved subsequently at institutional level and formed in a manner as any other unit was formed
in SARS at the time. These units were formed, mandated, managed and functioned in a lawful manner at all times;
40.2, At no stage did such unit, or its later permutations2l acquire or utilize or possess any "spy equipment",
especially equipment utilized to intercept communications . The Anti-Corruption and Security division (ACAS)
within SARS acquired certain commercially available equipment of such a nature. In the circumstances, the
allegation that such equipment was used or authorized by the SPU/NRG or HRIU is untrue and misleading
40.4. A complete list of the so-called "dashboards" of each year of the existence of each unit held in SARS will
display the details of projects and investigations that resided under them. At best these investigations can be
described as data-mining, discreet investigations, elements of surveillance (in a manner no different to how private
investigative firms or other state agencies that are not intelligence agencies conduct surveillance) , identification of
potential witnesses and evidence and verification of assets, identities and addresses;
40.5. The units were managed like any other unit in SARS with an accounted for cost centre, HR files, leave
applications , reflected on the SARS personnel database, were remunerated from a shared SARS cost centre,
including travel, subsistence and the like;
40.6. The units did not have "front companies" or "false identities";
40.8. All the allegations published in the media comprise mostly of a little truth and much embroidery and fiction
and each have an origin that was explained to SARS by Mr. Ivan Pillay, Mr. Pete Richer and Mr. Johann van
Loggerenberg whenever they arose. At no stage does it appear that any effort was made by SARS to: a) investigate
the leaks to the media; b) ascertain the true facts of the allegations and rumours; and c) protect the reputation of
SARS by countering such rumours and allegations with the true facts. SARS did not even conduct the most
rudimentary process of calling the SARS officials who made such allegations , requesting them to submit their
allegations under oath and requesting specific details of the events i.e. who, who else, when, why, how, dates, times,
places - which I verily believe would have easily enabled SARS to counter these allegations publicly and protect its
reputation. Instead, these allegations were simply left unaddressed within SARS and in the media. It leaves me with
the inescapable conclusion that these "narratives and "stories" were considered convenient and led to very drastic
steps by the Commissioner since September 2014 that impacted very negatively on SARS,
My concerns
41.1. It would appear that none of the institutions or investigative bodies to whom the true facts had been provided
had considered or referred to any of the very serious allegations and substantiating evidence in respect of Mr. Peega,
Ms. Walter and Colonel Nienirnan mainly, as well as other persons;.
41.2. . Neither the "Sikhakhane Panel" nor the 101, SARS or the Hawks have made any attempt to engage with Mr.
Ivan Pillay, Mr. Peter Richer or Mr. Johann van Loggerenberg about the information that should be of a far greater
concern than what SARS has been pre-occupied with;
4 1,3, None of the SARS officials affected by the allegations advanced by Ms Walter, Mr Peega and others - Messrs
Ivan Pillay, Peter Richer, Johann van Loggerenberg and Yolisa Pikie or any other SARS employees - by way of
complaints, media source reports, radio interviews and television broadcasts have been allowed by SARS, nor
requested by SARS to assist SARS in defending its public reputation by stating the correct facts;
41.4. Mr. Johann van Loggerenberg has on multiple occasions requested SARS, without success, to act against Ms
Walter in respect of evidence lie provided to them. Instead Ms Walter has instituted a combined summons against
SARS and Mr. Johann van Loggerenberg in his capacity as an employee of SARS. In the circumstances, I am left
with the distinct impression that the allegations by Mr. Peega and Ms Walter, which are unsubstantiated and
unsupported appear to cany credence in certain quarters, at the same time when a list of activities have been
highlighted which require at the very least SARS and the Hawks to act against her and others,
Conclusion
42. In the circumstances, it is my view that it would be in the interests of the SCOF and the JSCI to engage with
SARS and request them to get Messrs. Ivan Pillay, Pete Richer, Johann van Loggerenberg and Yolisa Pikie to make
submissions to the committees in this regard.
43. I have known and worked with the individuals listed above for more than a decade, often under difficult
,
circumstances and I have never had any reason to doubt their integrity. They have each played key roles in the
development of SARS and in particular SARS's contributory role in combating organized crime.
In my experience they have always acted without fear or favour and in the best interest of the country, its citizens
and the fiscus. Their track records speak for themselves. I believe it to be a travesty ofjustice if matters are left to
continue at SARS as they have been since September 2014. We would all be failing in our collective responsibility
towards the fiscal future of our country if these matters are not properly interrogated. This is what motivates me to
make this submission to you for consideration
Yours faithfully,
Footnotes:
lThis forms part of what was submitted to SARS, and the so-called "Sikhakhane Panel"
3 Since the meeting was recorded without his consent, but on behalf of the SSA, the SCOF and JSCI should request
a copy of the recording of this meeting from the SSA,
4 An email from Mr. Johann van Loggerenberg addressed to the auditor concerned dating from time and confirming
will be available in the archives of SARS
5 Multiple instances where this occurred are reflected in whatsapp texts exchanged within the context of the private
relationship.
6 Carnilinx (Pty) Ltd ("Carnilinx"), specifically to one of its directors, Mr Adriano Mazzotti.
7 Email to this effect was sent to the client "Carnilinx", SARS Legal Administration, SARS Enforcement.
8 Email to this effect was sent to the members of the body, SARS Legal Administration, SARS Enforcement.
9 There is an e-mail and a sms text from Ms Walter confirming this, This information also forms part of the affidavit
of Van Loggerengberg and was submitted to SARS, the so-called "Khanyane panel" and the so-called "Sikhakhane
Panel"
10 This forms part of what was submitted to SARS, the so-called "Khanyane panel" and the so-called "Sikhakhane
Panel"
1 iThis forms part of the affidavit as was submitted to SARS, the so-called "Khanyane panel" and the so-called
"Sikhakhane Panel"
12 Various letters authored by van Loggerenberg in his official capacity at the time, and a meeting and letters
addressed to General Moonoo and General Dramat of the Hawks and Detective Services will reflect this, In
addition, he drafted a letter for the Acting Commissioner which to my knowledge was utilised to brief the President
of South Africa in this regard during Febi'uai'y 2014.
13 "This e-mail was followed by a direct apology from her to Mr Van Loggerenberg.
14 A specific text message sent by Ms Walter to Mr Van Loggerenberg in January 2014 clearly demonstrates this,
15 This was clearly incorrect in light of the fact that they only met in 2014
17 This forms part the so-called "Khanyane panel" and the so-called "Sikhakhane Panel" and is recorded in text
messages exchanged.
18 This forms part of the so-called "Sikhakhane Panel" and a copy of this email was attached as annexure.
19 This forms part of what was submitted to SARS, the so-called "Khanyane panel" and the so-called "Sikhakhane
Panel" as well as the Inspector General of Intelligence
20 The interview was recorded by the !GI and these narratives should be available to the JSCI.
21 Special Projects Unit,National Research Group and lastly High-risk Investigations Unit
22 Ms,Walter confirms this in text to Mr Van Loggerengberg. This was submitted to SARS,the so-called "Khanyane
panel" and the so-called "Sikhakhane Panel"
Dear Commissioner,
October 2014. The first interview consisted in a generic description of the context
5 for enforcement at SARS. The main points I relayed to the panel are reflected in
2. During the second interview I provided the Sikhakhane Panel with a written
submission, supported by numerous annexures. After the interview a written
supplementary submission, also supported by annexures, was provided to the
Panel that dealt with issues that were raised during the interview and may not
have been fully canvassed in the initial submission.
3. I believe that the report of the Panel as it stands cannot be considered final and
is not ready for publication for reasons that I outline below. This note does not
deal with each and every finding in the report but only those aspects that are
is suggested to be eminently open to challenge.
4. It is important to understand the background to the appointment of the
Sikhakhane panel and the mandate given to it.
4.1.During May 2014 Ms Belinda Walter made a number of allegations against
Johann Van Loggerenberg, SARS Group Executive: Projects, Evidence
20 management and Technical Support. Consequent thereon, the Acting
Commissioner for SARS appointed a 3 person panel ("the Kanyane panel") to
25 4.2.The report of the Kanyane panel stated that it makes no definitive adverse
findings against Mr Van Loggerenberg, and the panel in its conclusions
stated, inter-a/ia, the following:
1
"We are unable to conclude that the evidentiary material presented by Ms
Walter in support of the allegations is credible, especially in circumstances
30 where the allegations are denied by Van Loggerenberg."
35 "In view of what we have said above regarding the insufficiency of credible
reliable evidentiary material to support Ms Walter's allegations, we cannot
conclude that there is a prima fade basis for the acting Commissioner to
institute a formal investigation of these allegations, unless these allegations
are corroborated at a later stage."
40 4.3.Although the Kanyane panel did not make any finding of wrongdoing or
breaches of the law by Mr Van Loggerenberg, since the matter had come
under public scrutiny, and having regard to the importance of protecting the
integrity and credibility of SARS as an institution and maintaining public 'trust
in SARS, the Acting Commissioner decided to appoint an external panel ("the
50 4.5. The mandate and function of the Sikhakhane panel was certainly not merely
to gather evidence and to report on whether or not evidence exists to support
the allegations made. The Sikhakhane panel was required to critically assess
2
findings against Mr Van Loggerenberg, based upon the allegations made by
4.7. Evidence can consist of oral testimony (either under oath or not), an unsworn
4.8. Courts of law and tribunals which are called upon to investigate and report on
finding tribunal that certain evidence exists is neither a finding of fact nor a
final conclusion.
80 into account, and it is the factual findings based on a critical evaluation of the
3
4.10. In the matter of Betha and others v BTR Sarmcol 1998(3) SA 349 SCA at
page 405, the South African Supreme Court of Appeal stated that primary
facts, and that the drawing of an inference for the purpose of establishing a
secondary fact is also a "finding of fact".
4.11. With regard to the drawing of inferences, our courts have repeatedly quoted
with approval the following statement made by the English House of Lords
95 speculation or conjecture."
4.12. The South African courts have also consistently affirmed that in considering
fact if there is not a rational objective basis which justifies the conclusion.
100 4.13. Insofar as the Sikhakhane panel reported that "prima fade evidence exists",
without critically evaluating all the available evidence and assessing the
weight and veracity which should be attached to the evidence, and failed to
make findings of fact, it has failed to fulfil its mandate, and no reliance could
105 4.14. The publication by SARS of what may incorrectly be interpreted as "findings
of fact" and "conclusions of law" made by the Sikhakhane panel carries the
grave risk that this may be held to constitute admissions by SARS of the
correctness of what the Sikhakhane panel has stated.
5. According to paragraph 57 of the report, the Panel extended its mandate to
iio inquire into the legality of the establishment and the operations of the National
4
Research Group (NRG). The Panel based this decision to extend its mandate on
what was reported in the media.
6. Paragraph 57 of the report states that: "Shortly after the panel was appointed and
commenced its work, the media reports escalated and alleged the existence of a
us covert unit (my emphasis) that had been operating at SARS. By this time, we had
already interviewed some SARS officials, including Mr van Loggerenberg. It must
be stated that that the existence of such unit in any form was not specifically part
of the terms of reference. However the terms of reference extend, in our view (my
5
8. The procedural deficiencies in the extension of the mandate
a. Van Loggerenberg was not involved in the formation of the SPU and
the NRG. He only took over as the manager of the NRG in 2008.
130 b. Mr Pete Richer was not called to appear before the Panel despite the
fact it was he who was instrumental in the conception of these units, in
consultations with the then National Intelligence Agency (NIA). It does
not appear from the report that the Panel had interviewed Mr Janse
van Rensburg who was the manager of the NRG during 2007 and the
c. When extending the mandate the Panel did not inform SARS or any
person interviewed, of their intention to investigate the legality of the
establishment or the operations of the NRG. In fact, the report states
140 d. If the Panel considered the legality of the establishment of the NRG
germane to their inquiry the Panel would have had nearly a month
within which they could have raised the questions with SARS. The
Panel gave no indication during this period that the legality of the NRG
would be a material aspect of their inquiry, nor did the Panel indicate
e. Given that the genesis of these units lay in the period between 2006 to
2008 and thus reaches back to previous Commissioners, Ministers and
Deputy Ministers of Finance, it would seem prudent and procedurally
proper for the Panel to have called for representations from these
150 parties. This was not done.
1
Refer to sub-paragraph 74.4 of the report, which states that: "the unit was called NRG and was led by an
operative referred to as Skollie...under the management and guidance of Mr Pillay". Skollie is a nickname for
Andries Janse van Rensburg.
2
Paragraph 57 of the states that: "by this time, we had already interviewed same SARS officials, including Mr
Van Loggerenberg",
6
g. The decision to extend the terms of reference is unilateral and no
reasons are mentioned in the report for this extension except citing
media reports. Paragraph 14 of the report states, amongst other things,
155 that "the Panel met with Commissioner Moyane.. . .and confirmed its
160 Paragraph 21 of the report states that "during the investigation [the
Panel] sought to confine itself to the terms of reference".
objective can certainly not be read into the Panel's terms of reference.
170 them I explained that ". . SARS, through its highest office, approved the
.
Although my recollection cannot be certain, it is unlikely that I would have used the term, "Tiger Group" as
no such unit ever existed. There was however, a joint operation with the then NIA which was named
"Operation Tiger". The nomenclature of the various units that existed in SARS since 1998 is contained in my
initial submission to the Panel.
7
j. My interview with the panel, where the aforementioned information was
provided, took place on 19 September 2014. The media report referred
k. Once the Panel had decided to inquire into the matter, SARS was not
of the pains for governance that SARS took in establishing the NRG
and related units. This includes, but is not limited to, consultations with
the intelligence services, seeking Ministerial approval and adhering to
185 SARS internal procedures. This is part of the evidence bundle that was
had informally told me, on two occasions, that their investigations could
200 however is whether SARS in its current form has the statutory power to
of the facts and law that could reasonably lead to the question in
8
205 paragraph 45. Having stated the legal question in paragraph 45, the
report does not explain how they reached the conclusion nor does the
report explain the implications of such conclusion for the matters in
which they had to enquire. In my lay opinion this statement betrays a
lack of due diligence in reading the law on the part of the Panel and the
215 simple logic be precluded from an investigation simply by the fact that
they have acted in concert. Organised crime refers to several persons
acting in concert for a common purpose in a manner that transgresses
established law.
iii. The judgment in the matter of The State v Schabir Shaik, delivered on
investigate whether a criminal offence under the Income Tax Act, 1962
225 liability for tax then, in the first instance at any rate, it must be the
Commissioner's decision whether to prosecute the offender
or not, because prosecution under the criminal law may not
be necessary or even desirable in the interests of levying
and collectin.g tax5. If the Commissioner ... thinks that a prosecution
230 is desirable, then it would obviously take place under the auspices of
The State v Schabir Shaik and 11 others under case number CC27/04
My emphasis
A
9
the Director of Public Prosecutions, as any other prosecution instituted
by that authority"
iv. This judgement confirmed the existing understanding of the law and
codified an established practice. Pursuant to the SARS mandate of
235 administering tax and customs law SARS has been granted extensive
245 interpretation of the law. The Panel was supplied with list of all the
projects that the NRG, the SPU and the HRIU had conducted from
2007 to 2014. In fact, the report in paragraph 70 cites some of the
examples of the investigations. The Sikhakhane report gives no
indication that in those instances the investigations had been into
250 offences that are not related to tax or customs. On the contrary where
10
260 also have had to consider the practices within the intelligence services
and compare the work of the NRG and related units to the commonly
accepted legal standard and operational practices of SARS. We found
ii. In the absence of a cogent definition of what the Panel considered and
due to the lack of transparency in the report about what factual
considerations the Panel made, we can only speculate on their
reasoning.
270 IiI. I suspect that in reaching this conclusion about the "covert" nature of
the NRG, the Panel made three errors, namely:
275 that came to be after it became clear that the NIA would no
longer host the contemplated unit (they are not the same); and
280
285 9.2.Furthermore, the Panel has failed to analyse and critically evaluate the
evidence and disclose the basis for its findings and recommendations, If the
Commissioner were to decide to accept and act upon the Panel's report and
11
legal challenge, it would be difficult for the Commissioner to justify the taking
290 of the action in that the Panel in its report has failed to set out the material
evidence which it received, has failed to disclose what evidence was
accepted or rejected, and has failed to set out the factual findings on which
no jurisdiction over SARS. In fact, the law limits its jurisdiction to the
300 intelligence services. The services are defined in the Inspector General
for Intelligence Services Act as "the Agency, the South African Secret
Service, the Intelilgence Division of the National Defence Force and the
9.3.2. At any rate, SARS has cooperated with the IGI investigation that was
matters as did the panel. It is not clear what new issues the Panel
proposes to be investigated by the IGI. We have received reports from
310 the various officials that appeared before the lGl which indicate that the
focus of the exchanges between them and the IGI investigators was
largely on the NRG.
6
The Sikhakhane report refers to the Inspector General which we deemed to mean the Inspector General of
Intellligence
12
315 powers of compulsion in terms of section 3 of the Commissions Act 8 of
320 It is therefore understandable that the Panel should have found this
option attractive. But, we must urge caution here. A Commission of
Inquiry is a legal instrument at hand for the President with specific uses
and limitations. Secondly, one must always guard against overreach — to
325 9.3.5. For these reasons, what follows here is a rather lengthy treatment of
the possibility of instituting a commission of inquiry.
330 advice.7
ii. Section 1(1) read with section 3(1) of the Commissions Act8 grants the
President the statutory authority to confer powers of compulsion on a
340 findings.9
President of the Republic of South Africa v SARFU 2000 (1) SA 1 (CC), para 147.
8
SARFU (supra), para 155,
S v Mulder 1980 (1) SA 113 (T), at 120 F-G; SARFU (supra), para 163,
13
iii. In the present circumstances, a commission of inquiry could notionally
345 such a request but, for the current purposes, assume that he would. It
vi. Under section 2 of the South African Revenue Service Act, No. 34 of
1997, SARS was established as an organ of state within the public
365 Viii. Accordingly, while a commission of inquiry could establish the facts
relating to the alleged conduct, such a process may be of limited value
to decisively act against any SARS officials that are implicated in the
conduct described in the report.
(
14
370 9.3.6. In addition, the recommendation for the institution of a Commission is
375 The recommendation does not specify the issues that a commission of
inquiry should look into that the Panel could not have.
It also does not make clear how an issue involving 26 members of staff
iv. A Commission of Inquiry will not be in any different position than that of
380 the Panel, except that a Commission of Inquiry would have compulsion
powers. Nowhere in the report does the Panel state that not having
such powers influenced the outcome of the report.
390 reckoning, did not suffer from a shortage of witnesses. In fact, it had
the opposite problem of more witnesses volunteering to appear before
15
such investigation will be. Presumably, the suggestion is that those
ii. Be that as it may, one would have expected the Panel to proffer factual
findings that demonstrate that the NRG (or other related units) conducted
iv. Having regard to the relevant sections of the Income Tax Act (ITA) and the
410 Tax Administration Act (TAA), I need to point out that any consideration to
amend or alter a settlement is against the law. I will deal with that in more
detail below.
v. Section 148 of the TAA deals with the finality of a settlement agreement
and states: "The settlement agreement represents the final agreed position
415 between the parties and is in full and final 'settlement' of all or the
specified aspects of the 'dispute' in question between the parties."
vi. Before the TAA came into effect in October 2012, similar provisions
existed in the ITA. Section 88 dealt with settlement of disputes and states:
"The written agreement will represent the final agreed position between
420 the parties and will be in full and final settlement of all or the specified
aspects of the dispute in question between the parties." — section 88F(4)
vii. It cannot not ne that the Panel intended an action that contravenes the
TAA
viii. This above is a further indication of the Panel's lack of due diligence in
16
10.1. The Panel ignored, overlooked or did not consider
significant amounts of evidence presented to it and gave
430 credence to unfounded allegations.
i. Paragraph 23 of the report states "the evidence was in some instances
ii. While it is clear from this statement that the Panel did not consider
everything that was placed before it, it is not clear which evidence was
iii. It is however clear from the findings, in sub paragraph 186.1 and
440 paragraph 188 and paragraph 189, that the Panel overlooked
evidence that would have, at least, cast doubt in its findings or
neutralised them completely. I refer the Commissioner to paragraph 26
445 these were overlooked, or if they were considered, why they were
disregarded. If the Panel had any reason to doubt the averments or
the facts provided in their support, they did not inform me.
iv. That the Panel overlooked the submission I made to it, is made clear
in paragraph 14 of the report which states "Mr P//lay provided the
455 delicately the report makes the point. The supplementary submission
contained two reports, being a finance report on issues raised by a
17
Sunday Times article relating to the acquisition of equipment for the
NRG and a report on equipment that Danie le Roux had handed over
to Tony Apsey.
460 vi. Paragraph 65 of the report makes the observation that "evidence was
presented suggesting that certain electronic devices were indeed
recently returned to SARS". This remark is meant to substantiate the
conclusion that members of the NRG and related units had been
involved in what seemed like 'covert' operations and the electronic
465 tracing of vehicles and individuals. If the panel had regard to the report
vii. The finance report makes clear that neither the NRG nor any other
business unit in SARS acquired equipment to the value (R546million)
viii. The report, regarding the equipment from Danie le Roux, makes clear
475 that the equipment referred to therein had been acquired in 2006 for
purposes of combating theft and corruption within SARS.
ix. The conception, establishment and the legality were addressed in the
485 Modernization division and had the custody of the equipment with him
18
throughout this period. Mr le Roux only joined the NRG in 2007 and
never became part of the High Risk Investigation Unit (HRIU). If the
Panel had any reason to doubt the submissions dealing with the return
495 had acquired the equipment under the guise of combatting internal
corruption, in contemplation of a yet-to-be established "covert" unit.
Looking at the list of equipment itself, it is hard to imagine that it could
xii. It would appear therefore that even where the Panel had considered
500 the evidence before it, in this instance, it proceeded to misconstrue the
xiii. Secondly, paragraph 81 of the report states — "one individual that was
later absorbed into SARS indicated that he found no evidence that any
of the information that he gathered had found its way into existing
xiv. The paragraph cited above, like in many instances in the report, has
appearance of being accepted as a fact. The Panel seems to have
adopted the testimony of the witness without demonstrating how they
consider it to be credible.
510 XV. I had the benefit of reading Mr Nyaphudi's report provided to the Panel
that led to the remarks in para 81. Specifically, the report states that:
19
sis case was to get access to the enigmatic Fana Hlongwana". He then
states that: "When / later joined NEU / made follow up on the cases
that I worked on while at the NRG. None of the evidence/intelligence
that I collected reached the NEU."
xvi. The fact is that the investigation into the business of John
525 liquidation. SARS however approached the High Court and took over
the liquidation. Three criminal cases were also handed over to the
NPA. A letter of demand was issued to the value of R69million for
customs duties. Information gathered to prove that John Bredenkamp
liable.
xvii. The above explanation clearly refutes what the Panel gleaned from
Nyaphudi's report. The Panel could have asked for this information
from SARS and SARS would have obliged.
a. The first five lines of the paragraph describe how the NRG used
to work, that is, they were divided into "cells and sub-units" and
that "each cell did not know what other cells were doing." It then
20
is not the case. Nyaphudi had been a SARS employee before
545 the NRG was formed. NRG was a business unit within the
enforcement division of SARS. When he left NRG to join the
National Enforcement Unit, it was a transfer within SARS.
xix. Another instance where the report states an allegation without having
550 reports states: "some of these members1° had been asked by one of
their handlers to pose as drivers to political figures like Mr Julius
Ma/ema and Mr Fikile Mba/u/a. They did not know how this task
related their tax functions (sic), but performed them as they had been
told never to ask questions". Further, paragraph 69 states "the covert
unit.11"
xx. When considering the passage above, one must have regard to sub-
560 paragraph 13.10 of the report referring to the Terms of Reference for
the Panel which requires the Panel to investigate: "[amy act of
impropriety in general or in terms of any law as well as any allegation
that may come to light in the course of the Further, the
Panel was aware that the contents of the report would be made public.
565 XXI. SARS would never give, and has never given, an instruction to an
investigator or an auditor to disguise their true identity to a taxpayer.
10
Presumably, members of the NRG
My emphasis
21
570 elementary tests to verify their allegations. They could have asked the
witnesses whether:
a. They had prepared and submitted any report arising from their
activity;
c. These activities were part of any of the operations that had been
disclosed to the Panel. If not, what are the alternative operations;
xxii. Of the four reports that were presented to the Panel, only one makes
mention of posing as the bodyguards and posing as drivers to political
585 procedural propriety of the instruction. It also does not state who gave
the instruction. We must presume that when the Panel's report speaks
of "members" in plural and refer to the doubts that these members had
expressed, the information must have been given as part of the
interviews. Once again, this is not immediately apparent in the report.
590 XXIII. The Panel should have distinguished between the written statements
and the oral testimony of the witnesses in determining what weight it
attaches to either form of evidence. This is not transparent from the
report. Read carefully, Tshabalala's report provides less certainty than
22
xxiv. Paragraph 67 states "Three of the witnesses confirmed that during the
600 operations, they had been asked to use fake SARS cards, bearing
false names"
xxv. This is another vague allegation that lacks essential particulars that
are necessary to verify it. Take note of the word, "confirmed'. A reader
of the Panel's report would be under the impression that the Panel had
xxvi. Had these allegations been put to SARS, SARS would have informed
the Panel that once the unauthorised acquisition of the fake access
cards were discovered, the manager of the unit at the time, Van
Loggerenberg, issued final warning letters to those who were
615 responsible for it — Janse van Rensburg and Frans van Niekerk. Final
written warnings are expunged after an effluxion of time. However,
Van Niekerk still works for SARS and can attest to this fact. But for the
xxvii. It is clear that some members retained the said fake card. SARS
620 management, at the time, should have assured that all fake cards
have been returned. I concede that this is a shortcoming in managerial
diligence.
10.2. The report attributes equal evidential value to all evidence placed before
23
I. The report does not demonstrate any instance where the Panel
weighed up the evidence provided against each other to determine the
by the Panel.
iii. The hierarchy of evidence determines the reliance that a finder of fact
lied.
12
See sub paragraphs 42.6 and 42.7 as an example
24
10.3. The report makes facile psychological commentary that should have been
655 avoided.
The Panel for instance refers to how SARS were "hypnotized" by van
Loggerenberg perceived power and charm.131t also refers to high level of
these observations.
i. As I have already stated in paragraph 2.3 above, the report states that
the existence of the NRG was not volunteered to the Panel until it was
ii. In sub paragraph 42.1 the report accepts as fact that Ms Walter cut
her formal ties with the SSA at the end of 2012. Yet in sub paragraph
42.3 the report states Ms Walter also revealed to the panel that she
670 initiated the formation of FITA as part the project of the SSA. FITA was
i. The finding in sub paragraph 188.1 that "the establishment of the unit
675 without having the requisite statutory authority was indeed unlawful',
reaches back to previous Commissioners of SARS, Ministers and
deputy Ministers of Finance. It would have been prudent for the Panel
13
Paragraph 24
14
Paragraph 24
15
Paragraph 54
"We express our disappointment that the existence of this unit, whose name or names we shall return to
later, was not volunteered to us in the early stages of the investigation"
ii. The most blatant omission however is in the failure to call Mr Pete
680 Richer to appear before the Panel despite fact that he was instrumental
in conceiving the NRG and the consultations with the then NIA.
iii. Among the list of interviews, Mr Janse van Rensburg, the erstwhile
manager of the NRG is not named and the report does not
state whether he'd been called and refused or he wasn't called at all.
685
of this unit had the real possibility of undermining the work of those agencies
tasked with the investigation of organised crime and the collection of
690 intelligence" In the preceding passages, we've already showed how "prima
fade" evidence is not a "finding of fact". The allegation contained in the
paragraph is introduced without any evidence referred to.
11 .The cumulative effect of the aforesaid is to render the report a mere opinion and
695 12.Based on the procedural, substantive and general deficiencies in the report as
detailed above, I am of the view that the report poses a significant and
unwarranted risk for SARS if the report were to be published in its present form.
The report also has the potential to tarnish, not only the reputation of SARS, but
also the reputation of those who are implicated by the unfounded opinions and
13. In light of the above, I recommend that the report, together with this response and
all other relevant material be referred to a retired judge from the Supreme Court
of Appeal. Every party that is affected by the issues in the report should be
allowed to make representations to the judge. The judge would then make factual
705 findings available for the Commissioner so that he can decide on the best course
forward.
26
CONFIDENTIAL
"F
PROJIECT BROKEN
ARROW
CONFIDENTIAL
PROJECT BROKEN ARROW REPORT
OUTLINE:
3. Time-lIne (incorporated)
PURPOSE OF
+ To bring to the attention of Mr. Ivan Pillay (IP) and Mr. Johann van Loggenrenberg (JVL) both of
SARS, organized efforts by certain identified individuals to destabilise, disorganize and ultimately
create havoc and damage to the reputations and stability of the targeted functionaries and that
of the SARS as a state institution.
Special Request:
+ I humbly request that the Information that Is written below be treated with the utmost caution
and confidence, as is my identity.
• The people that are involved here and mentioned in the report are extremely dangerous and
have connections to powerful resources.
Project Broken Arrow Report
1,
1.1.1 have met on several occasions this year (2009) with former SARS employee Mike Peega (MP),
whereby he duly informed me of his intentIons to merge with other individuals in order to
'expose' and possibly 'take care' of P and JVL and a host of other significant individuals in the
'NRG'. This would ultimately include the then Commissioner of SARS and now Finance Minister
Pravin Gordhan.
1.2, M P spoke of a number of interested individuals Inside the SARS who are more than willing to
combine efforts to target lP and JVL.
1.3. It must be borne in mind that, although the aforementioned names of people were identified,
NO other way of corroboration was actually done.
1.4.The aforementioned individuals have allegedly met on a number of times at different locations
before I could be approached.
2. Time-line of events.
3.
4.1. Safe house LR told us that we could use one of his townhouses in JKB.
4.2. Laptops, 3G Internet cards, e-mail accounts, cell-phones.
4.3. Dedicated cars for the entire operation.
4.4. FInancial budget for running costs.
0147101532 VEEDIEFSTALMODIMCLLE 5E
CAB NUMBER: . AG
I was also immediately notified the with reference to SectIon 35 of the Constitution of the
of South African, Act 108 of 1998:
3. That anythIng choose to say may be used in evidence against me in a court of law.
4. That I have the right to consult with an attorney of my choice, end where my Inability to prod uce
the services of an attorney WiN lead to en Injustice, the state will provide ma with the seMces of
an attorney.
5. That I am riot obliged to make a confession or a statement that can by used sasinat me,
CAB NUMBER:
her
a
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27/81/20e9 PACE 53
The decision to make the above statement answer questions la/is not my own.
/
I not aseaufted or threatened in any way to induce me to make the above statement
answer questions,
I not at present under the Influence 01 any alcoholic beverage hand/or narcotic related
suatance.
4J11 eatla led that everything stated was noted down correctly.
I not have objections to the manner in which this statement was taken down
were put to me.
Time :
*f
Op 2008-12-24 gedurende die nag hat ek na Vaalwater gereis tydens die ondersoek van 'n
sindikast wat Renosters onwettig jag en die horirigs verwyder, 'n Verdagte voertuig, rool
Toyota Corals met registrasie nommer: HOL 814 NW" sou vermoedetik die verdagte
persona vervoer. ER hat Inllgting ontvang dat die rool Toyota rels vanaf Vaaiwater in die
rigling Melkrivier, Ek hat oak vanaf Vaalwater in die rlgtlng van MeiRrivier gary met 'n
ongamerkte Polislevoeduig. Naby Melkrlvler bet ek 'n maroon kleurlge Toyota voertuig sian
verby my ry met registraslenommer : HLD 814 NW". Die voertuig moas waarskynhlk
omgedraal hat naby MelkrMer en teruggekeer bet na Vaalwater. Ott was ongeveer 05:00 op
2008-12-26. Ek ken sIege een swartman In die Toyota voertuig opinerk. ER hat vermoed
dat die beetuurder van die maroon Toyota persona op 'n pleas afgelaai hat am 'n renoeter te
jag en dat die maroon Toyota ears In Vaalwater sai wag tot by benodig word om die Jagters
op te IaaI. Ek hat teruggekeer na Vaalwater en 'n beriggewer geteak am die maroon Toyota
dop te hou totdot hy wear vertrek. Ore ongeveer 11:00 hat die maroon Toyota baja heastig
vertrek In die rlgthig van MeiRrivier. Ek hat by die Ingang van die lokasle gewag op die
Na 'n kort mkkle hat die maroon Toyota met registrasie HLD 814
NW" vanutt rigllng Melkrlvler In Leseding butte Vasiwater ingedreal. ER kern dat
dear ten minste vler (4) ewartmans nou In die maroon Toyota was, Ek hat in samewerklng
met Veatwater SAPD lade die ultgangsroetes vanuit Vaalwater gemonitor. Kort hiema hat
ek wear die maroon Toyota met registrasle" NW 814 NW opgemerk wear dit Ult die
Leseding lokasle ry en in die rtgtlng van Bulgerivier. Op hlerdle stadium Ron ek siege twee
swartmans In die voertuig opmerk. ER hat Bulgerivier SAPD Inkennis geetel om die maroon
Toyota met registrasle" HOL 814 NW "of" HLD 814 NW" vir my at to trek en die twee
verdate persone vir my ean te hou tot ek by hulie kam.
3.
Inspektaur Mafeto, van Bulgerivier 8APD hat my per radio gekontak en my meegadeel dat
by die verdagte voertuig met regletrasle" HLD 814 NW" afgetrek bet en aen verdagte
gesresteer hot, Ny hat my ook meegedeel dat die tweede verdegte weggehardloop hot.
Met my aenkoms by map. Mafeto hat hy san my 'n verdagte oothendlg. ER hat myself as n
lid van die SAPD geidentlllaeer san die verdsgte dmv my poilsie aanstelIingaertlflkaat. ER
hat dIe verdagte Ingelig liv sy regte. Die verdagte bet homsetf aan my voorgestel as" Mike
Peega". vardagte bet 'n beursie san my getoon met tn eantal kaarla in by.
Bestuurderslisonsie, bankkaarte, SARS Identifikasie keart met 0)7504225404080. Ook in
die maroon toyota voorin was nag 'n ewart beursia wet oR ondersoek hat in teenwoordigheid
16:41 0147101032 02
van Mike Peega. in hierdlo swert beursie was 1n beetturdersilsensie van persoon
Washington Phtri Hierdla kawt was uitgerelk In MaISW1. Dear waS 00k 'n Nedbsnk
bankkaart no. 1876 083 018. Ek hat in die panseildasia 'n TV liaensle gesien In die neam
van Miss M Mhlongo, Po Box 879, Green Side, Oukasle, Brlts, 0250 Ek hat vir die
vardagte Mike Poega gevra wie die verdagte Is wet weggeherdioop hat, wanrop hy gesê hat
dit Is Washington'1. In die teanwoordigheid van Mike Peega Is die maroon Toyota verder
ondersoek. Voorin was 'n pear tskkiea by die bestuurder sowel as 'ri aelfoon. Agter op die
agtarate sitplek was 'rt brood, twee Vaipre SUU waterbotteis (sen vol en die artder hail), een
Ronaqua 1.5 It waterboltai (vol)1 sen 21t Fanta orange (half). Hierdle bottels hat ek versamel
en in 'n forensiese ask geaeei met FSE 302148", Ek hat die bagaslebak
van die maroon toyota oopgemaak In teenwcordlghe(d van Mike Peaga en die
daarvan oridersoek en tilt die voertuig geleal Die volgenda Is gevind:
sen grocit byl, ongeveer 1.5 meter lank, "TUVIGS product service". Die
snykant Is wear skerpgemaak. Kop Is goudkleurlg met Inskiywlng° nmega
drop forged'1
eon .303 jaggeweer met reeksnommer'1 7526". Die geweer hat 'n grendel,
lee rband, bushneli sportvlew 4 x 38 teleskoop op asook magesyn. Die gewser
wee oorgehaai met 'n lewendige rondte in die kamer on tien lewendige rondtes
in die magesyn. Die lewendige rondtee Ba beskvywing: (a) 6 x skerppunt
ammunisle wearvan esri so punt met 'n tang vermoedeilk afgesny Is. (b) 4 x
aagtepunt 303 PMP lewendige roridtes, (c) I x eagtepunt 303 britIsh nny
lewendige rondte.
eon stel leisure nommar 7 tekkiea met dlamantpatroon op sooi - behoort eon
Washington
4.
Ek hot besiag gele op die maroon Toyota esook el die hems aoos bo beskryf. Ek hot
vemeem by mop. Mafotø dat die verdagte wet ontenap hot gekiee was In 'n blou t-hemp en
'n kamotleer kniebroek, Die verdagte hot kealvoet ontsnap. Volgens Mike Peega hot hy op
hierdle Kersdag 2008-12-25 aaam met venal PretoriaAely, verby
-
27/81/2009 8147181032
U U
await flits sonder batterye Japan
U
vuil groan hendskoen met neam Stephen binne in geskryf
- gaol
await belakiawa11 LO U
Vele000 die Oei*M0 cm twos loot en wig 0 tIMMe8d din ensign dog no toO woninO oeIcf 4
1st cm to tejbw, beweos dot halO osoottsoe$ ten hear locee Jodwa 0*4cm
8k hal Oosolloe goerooloea on coped vane? hwwweog belay die enaikdg goatee
en nam oy bones, Mar boner Jodeon 8*4 to Ole Yen sIc men atom
owes diegeaigopdepeapooot.
AX goweer oy elendoon to. 8kM4 oak die own von SOsO*to gnooootoor oongeabwt die AK
to ay homer wee. Hy0(dwn eke. Hy Is Joe Meekobe,
Olovctgend. cggend took dour hiap. Meida van OAPD Betgostneo b*seujo goest dot by
Waildoglosi goorcetoor hat 8k tnt no OAPO erloorpgoon wow Map. MeMo * my
'n ewotbnon ceotmedig tnt not to 'to b&ooi I4iomp en terncltooo galilee woo. 8k
boO weji oto poison gehlenVioeat isle potolobeomcl.dma soy p000!. Id beset on
hot dl. posoon en eagle *on hoso vseiloiedk. Ole wodngte was ongotseprekond en hot
homoell ooWuM*o Tbwigwon. eon myvcoogostol, lOordla pOtooonhM my meegedeat
dot hyvh'npotscoo
aidnop eon Igrselliio. Weotslnglaoi wee berold con *ooiote to gene utwye. Woshbigtai hot
bweosdel dl. mason Toyole' HOL 814 NW' ion cy vow batsecot. Weoldeglon hot
by weal oeeos 'it .308 gawearwaggeetookls detuhameny to 8410 on dot by
wya4etg Noidlo gneose eel iamye. 8k hot Wae08igtoo tOont. C, lkilela 001h001rig wet
ourn mat my WMOoosn to con no Noodle .303 gewoo.'to Voodoglo lIke
Pedge won loenwociodig too Weoldogien ldonllobawedngo moakonhat giti dot by by ey
nedlgadlowaa,oolusyawotstloododlyaegiIcoktocm,aiewtoos toolint. 8khot
like Poogo noogooal in oyonbtgto dlgn&7. Clissealwocosgsbled, Prekirlo
Nowd llorhethy'n POi In tolgsrsofsaptebeoto'RIW 16002P'uPganoys. like
Poagobstitovoostdg en bogeeiel.dlocppoiuoekenwoobolavoiboco. Hylntnbmygeei
del die gevoowkt ekeogootoboiwee. 8k hot 'ii to8 S le .303 gawean Its di.
bogcdehdag.vtod, Mt. Pooga Oe motili wetdlbydbewoi*ig gontod hoe. Gugu
iou lIMO shaM vi0000 die dog die gaweattlom wowjdarmnt Dl. oon man woo 'ii
.b0!os. iyhotvoin'so*ddlo gawow to op die Atnolopad woggogcd on htst'n pOol goon
day.. Owl. gooo,koendee eutieoo. Kossot hMoto tnt myto Modowltoonto*4 onto
Ieenwooos0gbotd venWoolol.gten'n .308 met '6811 '.LXo
.303 gewoor bet 'ii groan oak doekeewl en legtandil oeooler'n mogesym AidbawurseP04%o
my ne Ic woe pettoow oil g on
1.
ElotoVot.osjdnwtdbWmoodvOndiw004ldOObigiflbe08P*
a bet pen beesoor lean dl. eM von dl. vowge*eWa aid nb
El beekou dl. voosgeolvowe cod 00 bindand *onygoneto.
8kooo*Ieoet dot die vooldeerdar ashen dot Isy vootzoud to awl dIe Macvol von die boetaosvda
on 011 haWk,. t6aidli vaeklos$srp to voormy boldig on
haniltokenhig to loony toemoasosdigleoll oongobthig to MOdim040 0920084240cm
CAS NUMBER: ,,
states In the of
who acted as Interprete, Into the .
.
(Janguage), a language understood by me
that, I am a years old, residing at 7
with telephone no and cellular phone no
lam employed at
wrk no ?. P
On I em In the presence of
tin pemal rank and nama)
Informs me that is the InvestigatIng officer ln this case and is ax officio a *peace
of the peace, and produces appointment certificate.
further Informs me that Is involved In the inveejgation of
S S
VS
MICHAEL PEEGA
EVALUATION REPORT
ACAS 0
t CASE DATA:
EMPLOYEE NUMBER:
AGE: 34
EPENDANTS: 0
I CA SE
UMITED.
I & APPROVAL
REFERRAL FOR PROSECUTION HAS BEEN APPROVED BY THE
MANAGER.
ACAS
BACKGROUND TO
Mr Michael Peega was employed as a specialist investigator within the
National Research Group. He was arrested in Vaalwater for Rhino Horn
Pouching and possession of Arms and Ammunition without a licence.
SUMMARY OF THE FACTS OF THE
Mr Peega received remuneration for services outside SARS without proper
authorization being at least RiO 00.00. He conducted activities during
November 2008 whilst he was on duty and on leave, where such activities
of a nature that was in conflict with the nature of his duties( illegal hunting
of Rhino, possession of arms and ammunition and arms).
SUMMARY OF THE EVUDENCE:
The evidence is primarily real/documentary and oral.
ACAS
_-J
A CAS
or leads that are received
and investigations should
be escalated to the team
leader who then
escalates it to Johan Van
Loggenberg who will
finally decides on how to
respond. Peega was
aware of the mandate of
NRG as it was discussed
with them on several
occasions. There are
minutes of meeting to
prove it.
ACAS 36fl
6'
ELI
The employee was found guilty as charged and dismissed with immediate
( Charges were drafted. Criminal case is still on against the employee.
failed at the CCMA in Pretoria. We are waiting for the date for
Arbitratlion.
ACAS
Signed at Pretoria on the 18 August 2009.
TP TSUAELI
Operational Specialist: Pro ecutor.
Or KANNEMEYER
MANAGER: Prosecutions.
YENH
AC S: SENIORS A GER
C COLLINGS
ACAS: EXECUTIVE
ACAS
RISK IDENTIFICATION REPORT
L Case Identification
Male
race African
00008028
Head office
1.11 Employee years of 4 Years
service
1.12 Divisia ii Enfo rcement
Case Information
Y
PART B: BACKGROUND
1.1 Training
1,2 Management
1.3 Procedure/policy
1.5 Vetting
1.1 Greed
1.3 Revenge
1.4 General
dissatisfaction (job &
work environment)
1.5 Other
INTEROFFICE MEMORANDUM
Enforcement Operations
P Posthumus
GM: Enforcement & Risk
F Ramcharan
Mr. Ivan
AJ van Rensburg
Enforcement Special Operations
FROM Johann van Loggerenberg REFERENCE
amework 2007/2008
TEL NUMBER (012) 422 7227 DATE
PRlORrn' high
SUBJECT
RECOMMENDATION For approval
Approval
LI For Your Records Irifomiation
LI Action as required E Proof Reading
1. Comments:
In February 2007, the President in his State of the Nation Address clearly indicated severaf of the Governments objectives
for the coming year: ".,.start the process of further modern/sing the systems of the South African Revenue Services,
especially in respect of border control, and improve the work of the infer-departmental co-ordinating structures in this
regard; intensify intelligence work with regard to organised crime, building on the succe.sses that have been achieved in the
last few months in dealing with cash-in-transit heists, drug trafficking and poaching of game and abalone..."
This document proposes the mandates for those functions housed within the SMS Enforcement division: Special
Operations in support of the SARS strategic objectives. The activities housed wthin the Special Operations environment
are those operational activities that fall outside the normal steady-state businessand certain functions that aim to support
Internal Memorandum
2, TOPIC
3. PURPOSE
To obtain approval for the proposed mandates / structures, basic operating frameworks for the respective functions housed
4. DISCUSSION
4.1 Background
In February 2007, the President in his State of the Nation Address clearly indicated several of the Government's objectives
for the coming year: the process of further modern/sing the systems of the South African Revenue Services,
especially in respect of border control, and improve the work of the inter-departmental co-ordinating structures in this
regard; intensify intelligence work with regard to organised crime, building on the successes that have been achieved in the
last few months in dealing with cash-in-transit heists, drug trafficking and poaching of game and abalone,,.
This document proposes the mandates for those functions housed within the SARS Enforcement division: Special
Operations in support of the SARS strategic objectives, The activities housed within the Special Operations environment
are those operational activities that fall outside the normal steady-state business and certain functions that aim to support
the management of the division,
Derived from the Enforcement Strategy 200712008, within the operations environment a distinction is made between
"steady-state" operations, design and strategy and those activities that do not fall within the "steady-states environment,
The Enforcement structure as approved by SARS executive in February 2007 provides for the grouping of those "non
steady-staten activities under the auspices of Special Operations. The functions that are indicated under this part of
Enforcement are:
Enforcement Communications
case enforcement
management
Enforcement I
projects
commu
Proposed mandate:
Background
From time to time, SARS engagements with taxpayers I customs-clients result in:
— The matter becoming public knowledge via media where it is not in SARS'S interests;
— The matter being escalated via ministerial channels;
Set an example;
Typically the instances menUoned occur because of either of the following scenarios:
— The taxpayer is someone significant;
Political considerations;
Significant tax-liability;
Problem statement:
The Enforcement and SARS have definite needs when cases commence that have the potential to develop
into any of the situations as stated, The operational challenges are:
For management to identify these types of cases in time in order to allow for proactive preparation and planning;
• For Enforcement to have the capacity and capability to deal with such cases efficiently and in the most suitable
• Whilst these cases are being dealt with, normal operahons should not be disturbed;
Use the knowledge obtained in dealing with these matters to improve normal operations;
The original intention of the creadon of the Significant Case Management Unit arose out of a SARS EXCO discussion
and instruction during 2004/2005 and Enforcement was required to create the ability to identify and track cases of
It is therefore proposed that the Significant Case Management Unit be mandate to:
On a continuous basis identify, record, track and notify management of any audits, criminal invesdgations, debt
management actions, outstanding return collections actions and estate management actions within the
— Any matter concerning any person or entity that may be or connected to a political party in South Africa;
— Any matter that could lead to any precedent insofar SARS practice, policy or procedures;
— Any matter concerning any person or enfity that may be or connected to what can be considered a VIP;
— Any matter that could or may have already been reported in the media;
— The unit will be required to operate systemic soludons enabling the above.
A central register where cases or regional or nadonal importance are recorded and controlled;
— A formal process enabling operadonal staff to report potenUal cases of the described nature;
Proposed structure:
In order to fulfill its mandate, it is proppsed that the unit be organized in the following manner. The basic rationale is as
follows:
— Current case load of 184 cases suggest that the most efficient manner to allocate workloads will be on a
basis;
Zone 1 comprising of Gauteng South Gauteng North and Gauteng Central comprises of the largest volume of
significant cases and therefore justifies the allocation of at least 2 persons to coordinate and track cases in this area;
— Zone 2 comprising of the Western Cape, Eastern Cape, FreeState and Kwa-Zulu Natal justifies at least a single person
Zone 3 comprisIng of North West, Mmpumalanga and Limpopo justifies a single person tracking oases;
— The NEU justifies a single person coordinating and tracking cases in this area;
order to provide technical assistance in respect of significant matters to both the operational personnel involved In
such cases as well as to assist in the compilation and technical advice to management, a number of key specialists are
VAT specialist
Legal advisor
Custom specialist
2xSC
Coordin
lxSC
Coordin Coordi
I lxlT
specialist
IxSC
Coordi
ator ator nator nator
71 Z2 Z3
1 xVAT
specialist
'IxCustorn
a specialist
lxLegal
This function is currentiy only fulfilled by one person. Due to the proposed nature and function for this area of business, e
Early morning media brief to update Enforcement management of news highlights and SARS in the news.
Recipients: COO (Kieswetter); GM: Enforcement and Risk (Pillay); GM: Risk (Mokwena); GM: Enforcement
Enforcement ya Buwa
Bi-monthly General Enforcement and Risk newsletter to inform & motivate members explain issues and
create a sense of community
Con tent
Strategy
Business Plans
Developments
Action plans
• Office news
GM's Letter
Monthly newsletter to managers. Channel for GMs to address managers in an informal way, explain
SARS News
o Provide at least one Enforcementrelated article for SARS general newsletter for every issue
Editing
Ad hoc: Strategies, policies, correspondence, reports for GM's Office, GM: Enforcement Ops,
Weekly report to on noteworthy upcoming events and brief feedback of Enforcement-related media
Recipients:
Commissioner
COO
GM: Legal
SARS spokesperson
Act as contact person for Communication Division regarding media enquiries, eg find
organise interviews,
Weekly with Communications (Adrian) to discuss media coverage and assist whore possible,
Draft articles
Prepare press releases, draft arilcies and responses for external media, eg VAT News, Gauteng Business.
Proposed mandate
The National Enforcement Unit has a national mandate, which must be executed in full collaboration with regional
enforcement centers and the Large Business Centre and customs offices. will primarily be any or a combinaUon
of:
o Criminal
AU activities wili be conductod in accordance with Enforcement policies and procedures as published and amended
The unit is mandated to focus its activities Into any action required by the Enforcement Division executive where any or
SARS related audits, invesUgalions and other enforcement acflvitles of taxpayers and customs clients suspected of
being involved or associated with unlawful activities, (Illicit / organized crime economy)
Organized and sophisUcated financial schemes that has the actual or potenilal effect of misleading the public or
negatively abusing public trust and monies
• A case that may have the potenflal to develop into a situation that could affect the reputation of SARS;
• Cases of such a nature that pro-determined outcomes may necessitate the deviation from current standards and
norms
The structure of the NEU was approved by the executive in February 2007.
Data Analyst
rEnrorceme
Proposed mandate
The Special Projects Unit is mandated to focus Its into any action required by the Enforcement Division executive
Scope:
o The focus of the unit will be directed towards cases (current or potential) where activities of taxpayers fall
within the ambit of organized crime. A emphasis will be placed on cross-border and
related
o Activities will be in accordance with Enforcement policies and 2 roved and amended from
to
o The unit will have a national mandate and will be active in all geographic areas in South Africa.
The of key role-players in the illicit economy and collecting sufficient information
Additional
o Cases may also be referred to (he unit that are under investigation by conventional enforcement units
(based on executive approval and in SARS that may benefit from information gathered
Enforcement operations
Cases referred to SARS by means of external formal law enforcement units that may
of such a nature that pro-determined outcomes may necessitate the deviation from current
standards and norms.
Proposed structure:
Attached please find the proposed scorecards for the managers of the respective units as agreed in consultation with
them for the financial year 2007/2008,
In respect of the proposed measures, an incremental approach is proposed that initially aims at not only production
and quality but also places an emphasis on the building of the business units and stabilizing the organization within the
units, The effect of this approach means that managers will be expected by means of a Jag kpi to finalize aspects
(including systems) concerning structure, roles, job descriptions, grading, kpi's, PDP's and reports associated per role
on Weekly, monthly, quarterly and annual periods immediately. Over time, the emphasis will be placed on more
detailed lead kpi's insofar operations and production and quality and ultimately insofar the lead kpi to ensure impact in
the focus areas
Date:
NOT APPROVED
TO Mr I. Pillay CC Loggerenberg
PRIORITY Urgent
SUBJECT Mandate
Approval Li Verification
[Ii For Your Records [Ii Information
Li Acüon as required Eli Proof Reading
Comments:
PURPOSE
The purpose of this document is to obtain approval for a proposed mandate, work flow and structure for the Group.
The Group is currently in a re-design cycle and the approval of these proposals wifl give direction to the work to
follow.
Introduction
The group was tasked to create a capability that will fortify, compliment and support the SARS Enforcement effort. A
capability that can reinvigorate the current investigative and information gathering capacity of SARS Enforcement
and as such will have to;
)
Mandate:
mandate of the unit is to collect departmental intelligence relating to non-compliance in respect of tax, customs
and excise in a directed manner. The direction is informed by the focus areas identified in the illicit economy. The
focus will be information that is not normally available to SARS and will be collected by means of engagement of
identified persons (recruitment) and observation of suspect activities (surveillance.) This information will aim to
provide the following:
0 Recommendations and justification to enforcement units on targets for auditing or investigation within the
selected focus areas in the illicit economy when directed to do so;
o Collecting specific information pertaining to identified suspect entities or individuals under investigation, with
the aim to identify potential evidence and the location thereof (documentary/goods or potential witnesses),
that will enable investigators to access it easier, as directed;
o Specific ad hoc tasks (as approved) relating to the engagement of potential witnesses or suspects and
observing activities as directed, in support of investigations by enforcement units.
All the above activities will be done within the legal and policy framework of the South African Revenue Service.
Workilow:
The group designed a workflow process that will support the execution of the proposed mandate. The workflow is
fundamentally about the organization of our work. It describes a set of activities that will coordinate our team
members and work, Take note that the workilow model is fractal, meaning sub-processes will be defined separately.
Each of the sub processes may consist of micro aggregated services. This model will encourage re-use and
agility, which will lead to more fixed but also flexible business processes. Based on past pilots, previous experience
and best practice the workflow attached to this document below is proposed.
ii
1 H -
4
4 -
1__4
L
V
Structure:
The organizational structure was designed to be adaptive to process requirements as set out in the work-flow
document, aiming to optimize the ratio of effort and input to output The structure is designed to facilitate working
relationships between various roles in the unit and wifl support the working efficiency between diverse roles and
functions, We propose for this structure to be retained as a set order and the efficiency thereof to be monitored for a
four month period after which it should be reviewed.
)lfl light of the mandate and the developed workflow the following structure is proposed, based on the following
operational principles:
0 Single accountability and responsibility in respect of the entire operational unit.
• Specific functions were the accountability and responsibility will fail upon the
different Business Area Managers.
0 Specialist functions were applicable accountable to professional bodies.
0 Span of control based on 1:7 ratio.
0 Specialization based on workflow.
This constitutes the bare minimum structure. Upon implementation a future design will be developed based on an
end-state vision.
o Role: Overall responsible to plan and execute information gathering activities with
o Job Purpose: Accountable for the planning and managing of information gathering
unit to manage the volume of work, resources required and associated facilities.
Organize resources to manage and deliver information products.
o Job Purpose: To plan, organize, track, monitor, control and implement information
collection activities (informant recruitment and surveillance) that relates to willful acts
o Role: Overall responsible to plan and execute research and analysis activities with
analyze and evaluate operational and tactical information that would suppo the
I SARi
PLEASE INSERT TOPIC
trade, and any other circumvention of the provisions of the Customs and Excise Act.
He must further ensure that accurate and reliable information are available to
support the primary objective and also to provide direction to investigators to focus
o Role: To gather data from various systems as well as the analysis of this data and
o Job Purpose: To research, compile, analyse and interpret data from a variety of
sources, including governmental systems, 3rd party data, arrest reports, economic
and demographic reports, surveillance feedback, informant data, and other related
Operational
2) ConcoptualizaUon Document
3) Project Plan
4) Project File
5) InformatIon Reports
8) Source File
Office Based
1) Personnel File
Page 5 of 6
0 SARS Enforcement
PLEASE iNSERT TOPIC
5) Mailing List
6) Asset Register
7) HR Database
8) Registraion Database
9) Human Resources
10) Travel
11) Procurement
Head Office
Date: I
)!'
Ivan Pillay
General Manager
Date:
Introduction:
SARS wishes to respond to the existence and recent media-reports regarding a so-
called "intelligence dossier," The intention is to clarify apparent misconceptions that
seem to exist in this regard.
it is known to SARS that Peega has since his dismissal collaborated with
other former SARS employees who were either dismissed from SARS
because of fraud or opted to resign from SARS in the face of disciplinary
action. Furthermore SARS has obtained affidavits from a number of Peega's
former colleagues explaining that they were approached during the period
after his dismissal claiming to be working for the Presidency and that he
attempted to coerce them to "work for them" and provide them with
statements of alleged illegal activities in SARS. When they informed him that
they did not know what he was talking about, he became abusive and angry
with them. Peega and some of these disgruntled employees have been trying
since 2009 to force SARS to pay them money otherwise with threats of
publicly embarrassing SARS in the media by releasing a 'dossier." Some of
these threats have been made via email of which SARS has copies and form
part of an investigation by the SAPS. SARS believes that the document was
compiled sometime after July 2009 when Peega had already been dismissed
from SARS.
SARS believes that the so-called 'dossier" compiled by Peega and possibly
others is a classic example a type of report that is sometimes presented to
intelligence agencies by what is known in the trade as "information peddlers.1'
Such reports typically contain some fact that can usually be confirmed in order
to lend some authenticity to the report and then contain fictitious information
that supports some or other agenda of the "peddler." The failure of any
recipient of such reports to critically verify the content and then to further
distribute such reports tends to lead further authenticity to the report. This
"dossier" compiled by Peega at face-value contains very little fact, is
contradictory at times, is very poorly constructed and can hardly be
considered as factual. SARS believes that what Peega attempted to do with
this document is quite obvious: to discredit the integrity of SARS as a public
institution.
The version of the "dossier" in possession of SARS excludes the first three (3)
pages and some annexures which was visible in the original version shown to
SARS. SARS obtained a copy of this version from the media. Some portions
in the document in possession of SARS have also been blocked out. It is
believed that the exclusion of the first few pages and the censoring of parts
thereof were done deliberately by the author thereof.
The "dossier" in SARS' possession only highlights the last few names of these
members and for purposes of public distribution for this document SARS has
blocked out the names of current and former SARS employees. This does not
detract from the nature and content of the document.
When SARS became aware of the existence of the "dossier" arid its
slanderous content, the matter was reported to other law enforcement
agencies by SARS. SARS has and will continue to fully cooperate with any
other law enforcement agency requesting further information.
The following response relates to the version of the document in SARS' possession
and is believed to be the "intelligence dossier" referred to in the recent media
reports.
Page 1 lists a number of people who formed part of the unit in question. It is
not a complete list of SARS personnel that were in the unit. The names of
SARS personnel have deliberately been censored by SARS, for the purposes
of public distribution. Members of the unit in question investigated serious
instances of organised crime, specific to smuggling, drug
trafficking and abalone smuggling. The identities of members were kept
confidential as they faced real and serious threats to their personal
safety and that of their families:
o Person "A": SARS can confirm that this person is a SARS employee
and was deployed in the Special Projects Unit (SPU) later known as
the National Research Group (NRG). This individual remains an
employee of SARS and is correctly described in terms of background;
o Person "B": SARS can confirm that this person is a SARS employee
and was deployed in the Special Projects Unit (SPU) later known as
the National Research Group (NRG). This individual remains an
employee of SARS and is incorrectly described as an expert in data
systems and counter intelligence. Person "B" in fact has expertise and
background in criminal investigations and was deployed into the unit for
this reason;
o Person "C": SARS can confirm that this person is a SARS employee
and was deployed in the Special Projects Unit (SPU) later known as
the National Research Group (NRG). This individual remains an
employee of SARS and is correctly described as a former SANOF
member. The suggestion that this person was used as a 'honey trap' in
the context of the unit suggests that this person provided sexual
favours to subjects under investigation on instruction of SARS. SARS
rejects this suggestion with contempt and considers this to be highly
insulting to the integrity of the individual concerned.
o Person "D": SARS can confirm that this person was a SARS employee
and was deployed in the Special Projects Unit (SPU) later known as
the National Research Group (NRG). This individual has since
resigned from SARS and is currently employed in another government
department. The background of the person is accurately described;
o Person "E": SARS can confirm that this person is a SARS employee
and was deployed in the Special Projects Unit (SPU) later known as
the National Research Group (NRG), The background is somewhat
accurately described, however this person formed part of the linkage
between the unit and management mainly to facilitate management
and liaison needs and not due to what is stated as "because members
of the unit were not allowed to be at head office". Members of the unit
actuaily frequented head office throughout its existence.
o The "dossier" claims that induction for the unit was done at a private
location. This is true. At the time SARS used many outside venues for
induction purposes for various new entrants into SARS. Often the
venues would be selected based on the size and needs of new
entrants into SARS. Induction was conducted with some of the
members of the unit at the time. The content of the induction, however
dealt with the following topics:
• Basic introduction to legal entities;
• Introduction to various forms of income tax;
• Basic introduction to the VAT cycle;
• Basic introduction to imports and exports;
SARS illicit economy strategy;
• Basic forms of common customs and tax scams.
• Page 2:
In respect of paragraph 1:
In respect of paragraph 2:
o illegal drugs;
o illegal abalone;
o illegal importation of second-hand vehicles;
o importation of counterfeit goods; and
o smuggled tobacco.
In respect of Paragraph 3:
Page 3:
18th
o On their arrival at Durban airport on the
August 2008 while standing in a queue at the AVIS
car rental desk, Peega recognised Mr Tony
Yengeni. Peega and Mr Yengeni had a
conversation and Peega introduced some of the
members of the unit to Mr Yengeni and they had
an informal conversation this meeting was a
coincidence.
o In the parking lot of the rental cars, Peega walked
up to another person and had a discussion with
him and when asked by a member who this person
was he responded by saying that the person was a
member of the NEC and stated that he had met
him in Polokwane. Peega on numerous occasions
shared with his team members how well he knows
Mr Fikile Mbalula from "days long before he joined
SARS". On either the 19th or 201h August 2008
whilst the team was having breakfast at the Hilton
hotel Mr Zizi Kodwa who was also having
breakfast at another table came across and
introduced himself to the team members and an
informal conversation occurred. At some point Mr
Kodwa went to another table and conversed with a
lady, he then returned to the table and interacted
informally with the team members. One of the
team members made a comment that seemd to
have offended Mr Kodwa who then subsequentl
excused himself and left. Peega reprimanded
team member for talking "like that" to Mr Kodwa
after which this team member apologised and
stated that he did not realise who Mr Kodwa was.
o Peega claimed to his team members that he knew
that Mr Zuma was also staying at the Hilton at the
time, and he. invited the team to see what the
presidential suite looked like. Peega also stated
that he would be able to arrange a visit for them
via Peega's contact with the security personnel,
and he subsequently arranged a such a tour.
It is correct that the unit was funded through the cost code
502031. The cost centre 502030 however belongs to a different
department within SARS. The term "cost codes" refer to "cost
centres" which in turn refer to various units or divisions in SARS.
No cost centre in SARS is secret and is subject to audits by the
AG and SARS internal audit on an annual basis. The report
seems to confuse the terminology of "cost code" and "cost
centre.'
The report suggests that sources were paid with funds from
"clients". This is not true, The SARS annual budget makes
provision for a line item "informant rewards", and such rewards
are paid for from a central point in SARS and are subject to very
strict controls.
The suggestion that a secret account was managed by the unit
is totally unfounded as SARS does not operate in this manner.
• Pages 64:
o "Annexures":
75/16
of the NRG members in SARS and that the work they engaged
in was important to SARS, bullet 3 was an attempt to bring
about some order in the manner in which the unit dealt with
administrative issues bullet 3 (operational issues) was to
,
Comments:
1. SARS published a strategy to deal with the illicit economy in 2006. This
strategy took into account the operational agreement between the SAPS and
SARS wherein amongst others it is stated that the agreement was entered
into an attempt to combat and prevent offensives as contemplated in laws
administered by SARS. It also took into account a MOU between SARS and
the NPA which set out the strengthening of relationships in the field of
information sharing, joint enforcement action and combating trans-national
crimes and financial crimes. See Annexures "Ml" and "M2"
2. The illicit economy strategy identified specific focus areas where SARS
believed it could play a supportive role in the financial and criminal justice
system. See "Annexure N":
1
2000 the tax and customs intelligence unit came into being as was later
absorbed into the Business Intelligence Unit and today exists as two
separate business units namely, Segmentation and Research and
Case Generation and Compliance Risk.
b) The special compliance unit, the organised revenue crime unit, the
revenue activation programme and the Woodmead unit amalgamated
in to the national enforcement unit in 2006 and is now known as the
national investigations unit.
c) The prosecutions unit amalgamated with the criminal investigations unit
in 2009.
d) The special projects unit was formed in 2007 later changed its name to
the national research group, and at its inception was discussed with
NIA and SAPS GIG regarding its existence and future placement, as
well as its joint operational activities with such. The NRG later
amalgamated with a small part of the BIU to form the unit now know as
the illicit economy research unit towards the end of 2009.
e) The anti smuggling units in customs amalgamated with the newly
formed Customs Border Control unit to 2006 onwards.
f) There are small joint customs and audit teams which are mainly based
at ports of entry which came about in 2005 and still exist.
g) The special projects unit which handles significant cases came about in
2002 and is still in existence.
h) The forensic audit unit was established in 2009.
i) The unit has been in existence since 1999.
SHIOBAN WiLSON
Mathematics and statistician expert used as an operation statistic data capturer and information
analyst.
TSHABALALA
investigator within and expert in data systems within used as a thot soldier and
counter intelligence within the unit,
NORAH PITS!
Former Military Intelligence and investigator in the unit used as a foot soldier and honey trap
concerned suspects.
TIMOTHY MABASO
Former Military Intelligence and investigator in the unit used as a foot soldier.
EDDIE KOTZE
Former Police officer and manager in the enforcement within worked as liaison of
administration between the unit and the head office since we were not allowed to be at the head
quarters.
41'EAMS DIViSION
The teams were divided in a way that we could not know what others were busy with if
they were investigating other unit members because of their affiliation and who they associate
wtth and communtcation was severed by means ofcompartmentahzatiori of
I would regard concentration camps where a member had-to the team leader if he to
communicate with other members and failure to do that would result in blocking and bugging
of any communicative tools used especially within the black members.
Find attached the diagram of the Placement chart, inquiries will be addressed
S iNDUCTION
Induction was done in a private location where members were taken through tactics such as
Tracings
Tracker installation
Weapon handling
Bugging Systems
Sleep Deprivation
Surveillance ( Physical ,Mobile and Electronic)
Systems Breaching
Building Cover Stories
Changing of Identity
Communication Security
House Penetration
Cryptology
Safe Houses and their protection
For every exercise vetting would take place and cross training would take place on live targets
During the inception of the unit it was under management of Andrics van Rcnshurg foniier
N.LA Operative with close ties to the right wing who ran the unit as a personal entity
created confusion amongst team members as we would go after personal targets of various
managers from what we were told they were pedophiles to "tax evaders" of which the
units members would not see the end results especially black members, the unit became under
scrutiny from various law enforcement agencies but everything dissappeared without any
explanation from management.
The unit operated without a mandate from inception until some members complained ol the
legality of our operations whether the operations were revenue driven or personal agendas from
the white majority who were silenced with huge salary packages and blacks given an excuse of
budget constraints with exception of two black sympathizers who were at the lowest of (he
salary scales despite the promise of entry packages of not less than R550,000.00 per annum.
Late 2008 a mandate was proposed which never saw its approval and yet we still operaleft
Some grievances were lodged by members that happy with packages they were
never resolved to date because we were not on the S.A.R.S data base but were paid from Mr
ivans bud&et. Some members were paid out as said in the background above for
continuos complaints, between (Rimil and Rl,2 mu) and were told to leave and barred from
the media contact.
Some of the operations leading to right wing operatives were exposed by some black members
as we did a lot of so called "controlled deliveries" which we felt we were being used to escort
exchanges of abalone poachers which we never saw the bust as black foot soldiers wouid he
withdrawn as soon as the exchange of moneys and abalone takes place. all these operations
were verbally approved with no involvement of any other enforcement agency. Some dealers
would be arrested of which we believed were competitors to the concerned suspects.
Sources would be paid an undisclosed amount of money which were handled by what came to
he known as the INNER CiRCLE of the unit, The division created conflict and (JVL) as
the mediator and finally Andrics van Rcnsburg was tired but not before he threatened to CXfXISC
the unit and was oflèred a cheque' and the unit members warned to cut all ties
communication with him,
The unit was left without the manager until we were told that (JVI would be the manager but
nothing was on paper to that effect and that all operations would he approved by him or (IP) -
Meeting with these management was an obstacle for members with salary grievances who
were
sent from pillar to post. When also asking about the approval of the mandate in writing,we
were told to imagine if Pillay's signature could appear on the document, that wou'd cause a
serious problem and would expose him(IP), immediately then operations would carry on as
usual, as if nothing has happened.
The unit went through several name changes trying to shy away from being persecuted for
collecting intelligence on tax payers by means of covet tactics, we were recruited as Specialist
J\gents which later became Specialist investigators we were no longer intelligence Collectors
but Information Veritieis, all the nonsense Especially if we suspect El ial people dre
aware of our existence
More information with regards to the method of operation and approval of projects will he
attached in the minutes of meetings held at the time.
CRITERiA
Projecis were given psuedo names project managers would not give the lull intelligence until
we were on the target area .Post Polokwauc we were given projects and named TAX
OFFENDERS hut on close inspection we realised that the concerned targets were J.Z
sympathisers or what came to be known as FRIENDS OF J.Z subjects of interest were mostly
in GAUTENG and K2,N provinces and internally in SARS especially if perceived to he
aligned to JZ, when the black members objected to the merit and reason for investiaation they
would not he paid their allowances or either redirected to more hostile operations hut the
operations would still carry on with the exclusion of black foot soldiers then handed over to the
N [ Ii for further investigation and collection Operations would involve stalmg olrn4u I roni
residences (Dumpster diving),interccptiori of mobile and land lines, extraction of bank
statements, installing of tracker systems on vehicles and posing as loiuers around the premises
while monitoring movements via hidden cameras even using sound enhancers to listen
conversation of our targets.
When we request whose our client, we would be met with hostility and threatened with
insurhodination, as the instruction comes from above, meaning (IP and SVL). Ours was to do as
we are instructed, no questions to he asked. Cases would range from Chinese business people.
Indians aligned and known to he bankrolling JZ ,Black business people aligned to if and who
were vocal to his pre Polokwane. vocal members of the ANC NEC alwav.s told with
requests from clients'. During one operation post Poiokwanc we were in l)urhan (I liltori
Hotel) to he precise; I had a heated argument with the (cani leader questioning and
sharing the hotel with us, in this instance, it was Zizi Kodwa and Fikile Mbalula. ihe followuig
day 1 received a call from the management ordering me to surrender niy laptop and electronic
devices to the team leader, I was banned from meetings and little communication with the resi
of the team members,my mobile was tapped and I was under surveillance which I reported and
confronted some of the members about.
&MARQII4ALISAfION OF BLACKS
Black members internally began to be sidelined financially, knowledge of clients because they
were questioning the method of case selection and the criteria used for selecting targets as we
felt we were stepping beyond our jurisdiction, which was to collect revenue as we were told by
our managers before. It was also becoming very dangerous for some of us as we got deeper in
these operations, because it was quite evident that SARS was playing dirty and danjierc'ns
games, the issue was WIlY are the state resources being abused in such a dirty way'1 We were
also surprised to here that some of our members come from the NPA structures that were
thereatened by closure. At some point, documents were amended when we refused to take
cerlain instruction, certain members were told to leave this unit for refusing to in Dc dirt
and told not to be in touch with us for good. Some ofus threatened to go public with thr
activities and were threatened with disclosure clauses, all of a sudden approvalr uf nub
ligitirnate eases were made available to us as members and the direction changcd to
investigating counterfeit and textilc industry.
9 .PAYM.ENTS METHOD
I 0.CONCLUSJON
As concerned members of the community, we are aware that SARS is being perceived by the
public as an effective, most organized and highly performing organization. We however regret
that a lot of ill conceived actions taken and being performed by some senior management in
particular Merrs (IP) and (J VL) arc totally against our constitution. It is also a fact that the then
Commissioner Mr (PC) is well aware of these activities despite him always waiving the card of
being an activists. No one is safe, particularly if he disagreed with (PC), that will be the day of
athrocities and serious victimization if not seen as fighting his legacy. It is also very clear, how
his successor has been appointed, it is simply to protect and shield his activities, particularly
procurement in SARS. No one why, even the Auditor General failed to audit and give the true
reflection of the state of SARS, THEY WILL NOT DARE EVEN WI lEN WE KNOW, IHERE
HAS BEEN PROBLEMS [N THE PAST particularly with assets. including the assets that were
bought for our unit. Nobody knows their existence except for (PC), (IP) and (JVL), because
this state of the art equipment will raise eye brows and questions will be asked as In what is
being used for? Only agencies like NIA should be in possession of such equipment, but SARS
ghost employees are in possession of all that. Someone must stop this nonsense the
sccurity of our country is threatened, taking into consideration that the profile of some
members is questionable. We also appeal that the Enforcement team has been in existence since
1999, (PC), (IP) and (JVL) should he dismantled with immediate effect and be redeployed
elsewhere. Why is it easy for all SARS structures to he conlirwosly restructured hut not
Enforcement leadership, who is protected by (IP),
o stays intact
o Status of group
Group is not known
o Some members will be tasked to do things. When you are not tasked then the
least you can do is to go and study the policies with regard to leave, S&T,
traveL kilometre claims etc. It is the responsibility of every member to have a
basic knowledge or SARS% policies, procedures, mendate and the 34 laws
that govern BARS. (Internet)
o According to the law BARS cannot collect covert intelligence
o Everything we do must be measured against the following:
Is it approved?
- Skolils
I
-
Fwd: FW: Re
From: ]ohan De
Sent: 17 March 2008 02:16:25 PM
To:
Forwarded message
From: Skollie
Date: Man, Mar 17, 2008 at 1:02 PM
Subject: EW: Re
Ta: Johan De Waal <jddewaal©gmaiLcom>
Cc: itumeleng leeuw >1
From: Hayes
Sent: Ma)th 14, 2008 16:18
Subject: Re
*
NB: This email and its contents are subject to our email legal notice
which can be viewed at
Dear AJ
As discussed; Mr. PiUay requests to meet all the members of the team separately on the following dates and
time:
3H3046H00 GilbertG nn
Helgaard
OSHOO-09H30 Kenny
Keith Hector
and regards
Background
Much of what has been highlighted in the media regarding claims that SARS operated a
secret unit which allegedly targeted certain individuals for political aim can be linked to a so-
called "intelligence dossier" compiled by a former SARS employee known as Michael Peega.
It is also the belief of SARS that other disgruntled former employees assisted Peega in the
compilation of the "intelligence dossier",
Peega was employed in SARS in March 2007 as a specialist agent (customs), deployed in a
unit known as the National Research Group (NRG) which was tasked with investigations into
smuggling by organised crime groups. He was dismissed in May 2009 following his arrest
and charge of illicit rhino hunting. His criminal case is still pending.
Historically SARS, from Customs perspective, operated in what may be simply phrased as
an administrative approach focused on revenue collection. With the rise in issues of trans-
national crime and smuggling in particular linked to organised crime syndicates, it became
evident that SARS' Enforcement actions with regard to Customs needed to be adjusted to
successfully address this issue. This adjustment in the manner in which SARS executed its
enforcement mandate however took various forms over time, which were informed by the
"lay of the land" at a particular point in time, SARS' own interpretation and understanding of
what was required, as well as through consultations with law enforcement and intelligence
agencies of South Africa,
It is important to note that the emphasis has always been place on improving SARS'
monitoring and investigative capacity in order to address smuggling. This has been achieved
as follows:
a) The first unit created was a criminal investigations unit (1999) and this unit
still exists in SARS.
b) The anti-corruption unit was setup in 1999.
c) In 2000 the Tax and Customs intelligence Unit came into being and was later
absorbed into the Business Intelligence Unit and today exists as two separate
business units namely, Segmentation and Research and Case Generation
and Compliance Risk.
d) The Special Projects Unit which handles significant cases came about in
2002 and is still in existence.
e) There are small joint Customs and Audit teams which are mainly based at
ports of entry which came about in 2005 and still exist.
f) The Customs Border Control Unit (CBCU) was setup in 2006 and the
previously setup anti-smuggling units were amalgamated with the CBCU.
g) The Special Projects Unit was formed in 2007 later changed its name to the
National Research Group (NRG), and at its inception was discussed with NIA
and SAPS CIG regarding its existence and future placement, as well as its
joint operational activities with such. The NRG later amalgamated with a small
part of the BIU to form the unit now know as the Illicit Economy Research Unit
(IERU) towards the end of 2009.
h) The Forensic Audit Unit was established in 2009.
The establishment and reorganising of the above mentioned units is illustrative of SARS'
shift towards a law enforcement approach, specifically in the Customs environment.
Additionally, laws were amended to provide Customs with law enforcement powers,
including powers of arrest and being allowed to carry official firearms; a dog unit has been
established and are operational at major ports of entry; detection equipment such as
scanners have been deployed.
With specific reference to the Special Projects Unit (SPU) later known as the NRG, this unit
at its inception was designed to focus on investigations into smuggling activities of organised
crime groupings and by virtue of being housed within the CBCU environment, was deemed
to be a support structure to the CBCU, It is further reiterated that during the conceptual
phase of this unit, SARS consulted with the NIA and SAPS Crime Intelligence Gathering
(GIG) regarding its establishment as well as its future placement. As mentioned above the
unit was amalgamated with other units and is now known as Illicit Economy Research Unit
(IERU).
It is important to note that as far back as 1999 SARS started to strengthen its anti-corruption
capacity. There is a fully fledged structure known as Anti-corruption and Security (ACAS)
which forms part of Enforcement and Risk division. SARS has embarked on a zero tolerance
view of corruption with specific emphasis on its efforts to promote an organisational culture
of selfless service and integrity. Whilst this applies to the public service in general, the nature
of business at SARS heightens the risks, and makes the organisation a target of
sophisticated international crime syndicates.
The zero tolerance view of corruption has also been highlighted recently by the Deputy
Finance Minister Nhlanhla Nene, who remarked that "the elite have "pick-pocketed" state
resources through corruption, crony empowerment and by milking the state through charging
exorbitant prices." He also stated that "even as we search for a new growth paradigm and as
the world searches for a new economic paradigm, let us recognise that no system in the
world is sustainable if it is not underpinned by a sense of morals, ethics and values".
Similar sentiments were also expressed by the former Commissioner of SARS, now Minister
of Finance during the Budget speech. These sentiments are also shared by the
Commissioner of SARS, Oupa Magashula and is evidenced in the recent signing of a pledge
by the entire SARS executive.
SARS' efforts to root out corrupt officials, as stated above, dates as far back as 1999, and its
more recent anti-corruption campaign has shown positive results which is evidenced through
recent stats showing that between 80 to 100 members a year have either been dismissed
from SARS on corruption related charges or have resigned in the wake of disciplinary action.
For the period 2009-2010 the anti-corruption unit together with law enforcement agencies,
have arrested 30 individuals in relation to corruption within SARS.
In relation to the author of the so-called "intelligence dossier" SARS would like to highlight
25th
that Peega also faced disciplinary action which related to the fact that on the December
ammunition was discovered in the vehicle he was travelling in. Subsequent to his arrest
SARS became aware that he was being investigated on a number of charges relating to
illegal hunting of rhino.
At the time of his arrest Peega claimed to have been working as an undercover agent for
SANPARKS, this claim however was not true and he confessed in his statement to the
SAPS that he was involved in the syndicate. Additionally he was also on annual vacation
leave and any further claims of official operations within the NRG context would not be true.
It is understood that the above criminal cases have been investigated by the SAPS together
with the Enforcement section of SANPARKS and are currently with the NPA for prosecution.
In conclusion, it is SARS' belief that the anti-corruption drive within SARS has on the one
hand impacted positively on the organisation, and on the other has seen certain former
members colluding with Poega to divert attention from their own corrupt activities, by trying
to place disinformation such as a 'SARS hit-list" in the public domain. It is SARS' views that
the "hit-list" displays a carefully crafted list of candidates who are told that they are on a hit-
list and thereafter their support is leveraged.
It is important to highlight that SARS' selection of entities is done in the following manner:
• Random selection
• Risk engines which are driven by analysis and by statistical formulas; and through
• Suspicious activity reports which are sent to SARS and are verified before any
investigations are instituted.
SARS' position in terms of the State's ability to execute its Constitutional obligations, places
this institution in many respects at the heart of Government. This institution is a vital cog in
the wheel of government's ability to deliver, as such the integrity of the institution and the
confidence of the public in the institution is critical to Government delivering the necessary
revenue to fulfil the many demands on the fiscus.
Further, tax authorities of most countries are mandated specifically to shelter them from
direct party political influence in order precisely to prevent the undermining of the States
capability.
By the very nature of its work SARS will attract attacks from those attempting to avoid their
obligations to pay their taxes and carry out legal trade. SARS has consistently pursued those
who are non-compliant without fear or favour, without regard to political pressures and with a
commitment to fulfil its mandate with integrity and credibility. The strong stance taken by
both the present and former Commissioners of SARS against corrupt elements within SARS
is critical to maintaining the organisations integrity and commitment to treating all
taxpayers/traders fairly and with due process.
Giving credence to corrupt former employees potentially endangers the public confidence in
the integrity of this vital institution. Whilst any reports of wrongdoing should be investigated
fully, they should also be investigated through the correct channels and with circumspection,
and not through the pages of the media. The payment of taxes and compliance with customs
and tax laws has internationally been shown to be closely related to the public confidence in
the tax authorities, It is therefore at great risk that this confidence be undermined
unnecessarily.
What follows is a complete depiction of the details contained the "intelligence
dossier" reported on In the media, followed by the SARS response:
Some preliminary comments by way of introduction:
1. There seem to be more than one version of this document that has been distributed
publicly;
2. SARS only managed to get access to the version being addressed herein via the media;
3. This version has some pages missing from an earlier version that was shown to SARS.
SARS was not allowed copies of the first version. The essence of the various versions
remains the same.
The document begins setting out the details of SARS employees that were deployed in a unit in
SARS, based in the Enforcement & Compliance Risk division. The names of the employees have
been deliberately removed by SARS for privacy reasons.
Operator in ctarlc
analy'( expert inflhlrntion
*t loot udvke,: I
SARS response:
This paragraph refers to dismissed SARS employee Michael Peega. It accurately describes what is
contained in his CV.
Mathejnat and
used as an data eap(urer and
I.
SARS response:
This paragraph accurately describes a SARS employee that was deployed in the National Research
Group.
SARS response:
This paragraph accurately describes a SARS employee that was deployed in the National Research
Group, but is incorrectly described as expert in data systems and counter-intelligence, This person
has a background in criminal investigations.
Extract from "dossier"
SARS response:
This paragraph accurately describes a SARS employee that was deployed in the National Research
Group. The term "honey trap" suggests that the person provided sexual favours to subjects under
investigation by SARS. This is untrue, and more importantly considered offensive to the dignity of the
SARS employee.
SARS response:
This paragraph accurately describes a SARS employee that was deployed in the National Research
Group, who has since resigned from SARS and is now employed in another government department.
SARS response:
This paragraph accurately describes a SARS employee that was deployed in the National Research
Group. The suggestion that this person acted as liaison since unit members "were not allowed to be at
head office" is incorrect,
SARS response:
The team's division was done as is the case in any other unit in SARS in terms of span of control.
Work was allocated to team members on the basis of skill and expertise. The suggestions that
members were "compartmentalised" and in "concentration camps", are false.
It is not exactly clear what is meant by "blocking" and bugging of any communicative tools" but it is
assumed that it suggests the prevention of use and/or monitoring of or telephones. The
suggestion that SARS "blocked" and 'bugged" communication tools, especially among black members
is false. Apart from such activities being illegal, SARS does not have the capability to do so.
I racker instellatjojt
ggiug
Sleep t)eprivatiou
* ( .14)1)1k and
*
o Building Cover Stories
Clnging of identily
° ion Security
o I Jouse Ii,Cir lion
o Cryptology
Safe Ilotises and their
For every exercise vetting woujd take place and cross training would Uke place on live argels.
SARS response:
The induction for the unit was done at a private location as SARS did use outside venues for induction
purposes for new employees into SARS. Venues would be selected based on the size and needs of
new employees into SARS Induction was conducted with some of the members of the unit at the time
The content of the induction, dealt with the following topics:
The so-called "induction" referred to in this document is false. The report also refers to "vetting" which
occurred. The process of vetting SARS personnel is a lengthy process that is done in conjunction with
the National Intelligence Agency. Depending on the level of clearance required for an employee, such
a process could take up to 6 months. While Peega did undergo pre-employment screening like any
other employee, he was not vetted by the National Intelligence Agency.
Extract from "dossier"
During the inception of the unit it was under management Name removed bysARs
N.l.AOperativc with close ties to the right wing who ran the unIt as a personal entity that
created amongst team members as we would go after personal targets of various
S.A.R.S managers from what we were told they were pedophdcs to
the
units members would not see the end results especially black menihe.rs, the unit became under
scrutiny from various law enforcement agencies but everything dissappeare.d without any
explanation from management.
The unit operated without a mandate from inception until some members c nptained of the
legality of our operations whether the operations were revenue driven or personal agentias fiarn
the white majority who were silenced with huge salary packages and blacks given an excuse ot'
budget constraints with exception of two black sympathizers who were at the of the
Late 200* a mandate was proposed which never saw its approval and yet we still opcrnied,
Some grievances were Lodged by tncrnbers that weren't happy with packages bu' they were
never resolved to date we were not on the dasa base hut were j,aid from Mi
lvans Pillay's hud&et. Some members were paid Out as said in the above thr
complaints, between (RI mu and Ri,2 mil) and were told to leave and barred from
the media contact.
Some of the operations leading to right wing operatives were expose.d by scone black iembcrx
as we did a lot of so called "controlled deliveries1' which we rdt we were being used to escort
exchanges of abalone poachers which we never saw the bust as black foo whukl be
as soon as the exchange of moneys and abalone takes place. all these operations
were verbally approved with no involvement oany other eriforcemem agency, Stunte dealers
would be arrested of which we believed were corupetilors to the concerned suspetis.
Sources would he paid an undisclosed amount of money which were handled by what came u
he known as the of the unit, 'ihe division created crintlk-f and ti VI. e'tme as
,, 1,
1
uic "nit was wit how, the manager uOtj I we were told that U VI.) would be he
nothing was on to that effect and that at) operations wOuld hr appi-oved b\' hut
Meet flft With these 'imanageinent was an him ot
sent from pillar to post. Whefl also asking with salary were
were laid to imagine if 'Mr Pillay's signature could the approval of the mandate in writing,we
problem and woulj appear on the doc.UniCni, that won Id cause a
him() linmedj,,tejv ilicru operations
usual, as ifnoihirtg has happened, Cai'rv on as
During its inception phase the unit was under the management of a SARS employee who was a
previously employed by the National Intelligence Agency. SARS is not aware that this person is or was
involved with any right wing group that may have been or may be a threat to South Africa or SARS.
SARS doubts the veracity of this claim.
The report also suggests that the former manager ran the unit as a "personal entity" and that case
allocation to the unit was problematic. The suggestion that "the unit operated without a mandate" is
rejected by SARS. A formal proposal in a SARS memorandum dated 8th February 2007 dearly sought
approval for the appointment of personnel and proposed for the creation of a specialisect capability to
focus on organised crime and in particular smuggling. The memorandum further proposed that the
capability be created within the Custom Border Control Unit (CBCU) and sought to combat organised
crime in the following areas:
illegal drugs;
illegal abalone;
illegal importation of second-hand vehicles;
importation of counterfeit goods; and
smuggled tobacco.
(8th
This proposal was recommended by the General Manager Enforcement and Risk at the time
February 2007) and was approved by the Chief Officer Corporate Services on the 13th February 2007.
A very clear standard operating procedure was introduced to the unit. The unit was not in a position to
select investigations on their own accord. The unit was never managed as a personal entity by any
SARS employee. In a formal memorandum dated 25 July 2007, the mandate of the unit was further
expanded and linked to the government objectives to address organised crime for that year. Later, the
unit was moved from the CBCU to the Enforcement Special Operations sub-division and the mandate
was further developed to include the additional focus of the unit to be directed towards cases were
activities of tax payers fall within the ambit of organised crime and a particular emphasis was placed
on cross border and SARS corruption related activities, It was again emphasised that all activities
should be in accordance with SARS policies and procedures and that the activities of the unit would
be primarily on key role-players in the illicit economy. It included joint actions with law enforcement
agencies were official approved. On the May 2008 the mandate was even further clarified to
differentiate between collecting departmental intelligence and the purpose of the unit. The use of legal
methods and operating within the legal and policy framework of SARS was again emphasised. The
report seems to suggest "many name changes of the unit and that of the job-descriptions of the
members in the unit". This paragraph again seems to suggest something "sinister" in the activities of
the unit. This is rejected by SARS. The reality is far simpler in that. The Special Projects Unit came
under the auspices of the Special Operations sub-component as described earlier, and another unit
with the same name already existed. As a result, the unit's name was changed to National Research
Group (NRG) in order to avoid orgartisational confusion.
The suggestion that the unit came under the scrutiny of various law enforcement agencies is
disingenuous. Both the National Intelligence Agency and South African Police Service Crime
//
Intelligence Gathering were consulted frequently throughout its existence at various levels. The unit
often cooperated with various law enforcement agencies in the execution of its mandate.
It is suggested that SARS expected and designed the "operations of the unit to be Internal
notes (which happen to be attached to the "dossier") clearly states the opposite:
Bullet point 4 states clearly "according to the law SARS cannot collect covert
a to
covert Intel gence
Bullet point 5 stating "eveiything the unit does must be measurable against whether if is approved,
whet her if has to do with tax or customs
Bullet point 6 which states "eveiything the unit does must be in accordance to the constitution and
must be
Bullet point 3 placed the onus of responsibility to ensure basic knowledge of SARS policies,
procedures, mandate and legislation which governs SARS on every member of the unit.
It is stated that "white members of the unit were paid much more than Afilcan It is also
stated that "African members were given the excuse of budget constraints with respect their salaries".
Some of the highest paid members of the unit were white employees. However, so were some of the
African and Coloured members. The lowest paid member of the unit was in fact a white female. Some
differences in salaries did exist within salary bands associated with those posts.
The report then claims that ".. grievances lodged by members with respect to their salaries were never
resolved because the employees of the unit were not on the SARS employee This is
patently untrue. All SARS employees deployed in the unit (newly appointed) were interviewed and
selected for posts as is the practice in SARS. Motivations for appointments were done in the standard
interoffice motivation and were subject to approval of the senior manager human resources, manager
finance, general manager enforcement and risk and the chief officer corporate services. Internally
seconded employees were already on the SARS personnel database. Successful applicants received
an offer letter on a standard SARS letter head as is done with all prospective employees in SARS.
SARS as employer provided all employees with employee numbers and they were placed on the
SARS payroll system as is the normal SARS practice. SARS contributed to all employee's in the group
life insurance scheme as well as their medical aid schemes. All employees entered into a standard
employment contracts with SARS. No formal grievance was ever registered by any member of the unit
during its existence.
The report suggests that ".. some members were paid amounts between RI million and RI, 2 million
because of their grievances and were told to leave SARS' employ and barred from media
Since the inception of the unit to date, only one employee's contract was terminated by mutual
agreement and a number of employees resigned over the period 2007 to date. One member was
dismissed after an internal disciplinary and appeal process in June 2009. The balance of the unit
members was absorbed into the Enforcement Investigations component.
Itis true that all SARS employees are barred from sharing information that is either directly or
indirectly acquired by them in the course of their duty. This is achieved by means of an employee
signing an oath of secrecy once employed. All employees in the unit were required to do so.
The report then suggests that ". . .Afrfcan members in the unit were involved in a number of controlled
deliveries but were withdrawn as soon the exchange of monies or abalone took It further
suggests that "persons arrested were the competitors of other suspects". SARS' position is that every
controlled delivery that occurred during the existence of the unit was done in conjunction with relevant
law enforcement agencies. This unit did not have powers of arrest and all arrest executed were done
by the law enforcement agencies at their own discretion.
The report then suggests that "...undisclosed amounts of money were paid to souives and that JVL
(this apparently refers to Johann van Loggerenberg — Group Executive Enfo,t,ement Investigations)
was brought into the unit as mediator and that the former manager was fired, that the former manager
"threatened to expose the unit" and was offered a "silence cheque" as well as that unit members were
warned to cut ties with the former manager. It is common cause that law enforcement agencies do
under certain circumstances pay rewards for information relating to organised crime. It is also well
known that SARS policies and Treasury regulations provide for such instances. All such transactions
are subject to inspection by the Auditor-General on an annual basis.
Johann van Loggerenberg was brought in as manager at the time when the SARS operating
framework underwent change and for the simple reason that the span of control in the division
required an additional manager to ensure proper oversight. Insofar as the former departure
from SARS - it occurred on mutual agreement - when his contract terminated. This occurred amicably
and was certainly not because he 'Threatened SARS" as stated in the report.
The attached minutes being referred to in the report have not been made available in the version
provided to SARS and SARS can therefore not respond. It certainly is possible that the author may
have access to copies of such minutes if what is being referred to relate to the standard weekly OMS
reports. It is practice in SARS that business units participate in daily, weekly and monthly operational
management meetings and that such meetings are recorded in minutes. SARS would caution though
that in the event that such minutes are indeed true minutes of such meetings, the author and others
should be aware of the restrictions and obligations of privacy with regard to taxpayers. In the event of
the minutes reflecting names or activities pertaining to taxpayers, care should be taken to publicly
release such as it could be a possible breach of secrecy in terms of the Income Tax Act and Customs
Act. SARS can unequivocally state that such minutes NOT will confirm any of the targeted
taxpayers as mentioned in the "dossier" since none of them were ever assigned to the unit for any
investigation.
would not bepaid their allowancesor either and reakoji fOr they
rcdireeted,to more hut the
ojx r4lions would still
carry on with the c,xehmion of black root then
for further In
residences (l)unips(er
Op±ratioiis would involve stealing of ftom
ofe—mails. mobile and landlines. ton of bank
Statements, Installing of tracker
systems On vehicles and
while monitoring moveIllejils via bidden as around the premises
COO VcrSation 01 even using Sound enhancers to listen ic
targets.
SARS response:
The suggestion in the report is that "the unit was tasked to investigate various individuals based on
their political It further suggests that "the unit was involved in stealing mail, intercepting
emails, mobile phones and land lines as well as extracted bank statements and SARS
denies all as stated in these paragraphs. The process of task allocation for the unit was clearly defined
and the steps to be followed by the unit when cases where allocated. As already stated the unit's
mandate was to focus on organised crime in the illicit economy with specific reference to smuggling.
The investigations undertaken by the unit required approval for activities, at various points duiing a six
___________
stage process from ailocation to conclusion. Furthermore with reference to the annexure attached to
the "dossier" bullet point 7 clearly states that the focus area of the group stays within the illicit
economy and lists cars, drugs abalone and cigarettes as examples.
Again, bullet point 4 states that SARS cannot collect covert intelligence.
o to coUect covert
-
thitrirn, the hotel with us. in this inst5nce, it was Zizi Kodwa anti Fikile Mbaiukr.
day 1 received a call from the management ordering ore to my laptop and
devices to the lean) leader. I was banned from and flnla it-jib rest
at tire team memhcrs,my mobile was lapped and I was under surveillance whith I reported and
canf'rorrted some of the trienThers about.
The first part of this paragraph appears to be censored by someone and SARS can therefore not
comment on this part. The essence of this part seems to suggest "that the unit was sent to
Natal to investigate Mr Zizi Kodwa, and Mr Fikile It also claims that dismissed employee
Micheal @ Mike Peega was ordered by management to surrender his laptop and electronic devices
within this context. This is not true, According to the project documents, travel plans and reports
requested from the members who participated in the investigation at the time, SARS can confirm that
6 members of the unit were dispatched to Durban on the l8th to 27th August 2008. The purpose of the
travel was to conduct investigations in respect of three approved projects in the unit focusing on drugs,
abalone and counterfeit DVDs. Four of the members stayed at the Hilton hotel, At the time SARS had
a corporate rate agreement with the Hilton hotel, The hotel vouchers and travel costs were paid for by
SARS and can be identified accordingly. According reports obtained from members who accompanied
Peega the following incidents are important to mention:
On their arrival at Durban airport on the 18th August 2008 while standing in a queue at the AVIS
car rental desk, Peega recognised Mr Tony Yengeni. Peega and Mr Yengoni had a conversation
and Peega introduced some of the members of the unit to Mr Yengeni and they had an informal
conversation this meeting was a coincidence.
In the parking lot of the rental cars, Peega walked up to another person and had a discussion with
him and when asked by a member who this person was he responded by saying that the person
was a member of the NEC and stated that he had met him in Polokwane.
Peega on numerous occasions shared with his team members how well he knows Mr Fikile
Mbalula from "days long before he joined SARS".
On either the 1gth or 20th August 2008 whilst the team was having breakfast at the Hilton hotel Mr
Zizi Kodwa who was also having breakfast at another table came across and introduced himself to
the team members and an informal conversation occurred, At some point Mr Kodwa went to
another table and conversed with a lady, he then returned to the table and interacted informally
with the team members. One of the team members made a comment that seemd to have offended
Mr Kodwa who then subsequently excused himself and left. Peega repnmanded the team member
for talking "like that" to Mr Kodwa after which this team member apologised and stated that he did
not realise who Mr Kodwa was,
Peega claimed to his team members that he knew that Mr Zuma was also staying at the Hilton at
the time, and he invited the team to see what the presidential suite looked like. Peega also stated
that he would be able to arrange a visit for them via Peega's contact with the security personnel,
and he subsequently arranged such a tour.
All of the above occurred coincidentally and had nothing to do with the formal purpose for the travel to
Durban. Furthermore it needs to be stated that the team at the time was insufficiently resourced with
laptops and it was common practice for the team whilst travelling to provide daily reports to
management. The unit manager requested Peega to give his laptop to the team leader in Durban in
order to enable him to compile an report and these made him unhappy and almost lead to him
resigning. His team members convinced him not to resign. During their stay in Durban the team
'bumped" into Mr Fikile Mbalula at the hotel reception, the team proceeded to their respective rooms
and Peega remained with Mbalula.
Then a list of names of subjects/individuals supposedly under investigation by the unit is provided.
SARS's response in this regard is as follows:
None of the names listed were allocated to this unit for investigation at any point in time throughout
its existence;
Cases allocated to the unit were done formally in writing and only focused on subjects involved in
serious organised crime activities. Once any investigation was allocated to the unit, an
authorisation was recorded on a management dashboard which was subject to regular office
inspections. Taskings are very specific and in all cases the adherence to legal compliance is
emphasised.
The report suggests that lifestyle questionnaires, registry of assets versus income auditing and
money laundering investigations were conducted by this unit. In this respect the following:
o None of the members in the unit are auditors nor were they trained to conduct audits. They
did not have access to SARS' core tax systems and would not have been able to conduct
activities as suggested. It is highly unlikely that even if they wanted to conduct audit type
functions that they would be capable of doing so;
o The life style questionnaire is a relatively common tool used by tax auditors worldwide and
by definition requires direct interaction with the subject of the audit, The practice would
require SARS to send a lifestyle questionnaire under SARS letterhead in terms of SARS
legislation to the subject of the audit. This unit was not capable of conducting lifestyle
audits at any given time.
In SARS' view this list was deliberately crafted by Peega and others in order to create certain
perceptions that would suit their own agendas in the hope of somehow garnering support for their own
agendas.
cCrluin 'J)Sltuc[jfl,t, Certain inejitbers were told to leave Unit let' I to the dirt
'old to bC iii l()l,I(J) With US trw Some thrcatefled 10 the w,
acUvilics dnd thrcaicncd with disclosure i '1
ligiamalL cases madL avathihle to US members the tian UI
lexifle industry,
SARS response:
The suggestions made in these paragraphs are figments of the author's imagination. The report
suggests that some of the team member threatened to go public with information pertaining to the
activities of the unit and were supposedly threatened with disclosure clauses. SARS has on record
only one threat of this nature by a member of the unit. Michael @ Mike Peega threatened to publicly
embarrass SARS which occurred on at least two instances, namely:
On 10 February 2009, at 10:00 Peega made verbal threats to other employees in SARS indicating
that he intends embarrassing SARS in the media. What is important to note of this date is that it
was preceded by Peega's temporary withdrawal from the unit and placement at head office
following his arrest in December 2008 and subsequent release on bail of R20 000. Peega
continuously arrived late for work and received a written warning for this which seemed to have
upset him.
• Later on the same day the manager of the unit received a telephone call from an attorney Elise
Swanepoel, who acted for Peega in his disciplinary hearing. During the telephone conversation
she asked that SARS consider paying Peega a year's salary in which case he would resign,
alternatively it was her instruction from Peega that he would go to the media and expose SARS.
The manager warned the attorney that what she was stating was tantamount to extortion and that
it was highly unethical for a legal practitioner. The attorney asked for a formal meeting on the same
day and the manager agreed and took along another manager as a witness. This meeting took
place at the attorney's offices in Malherbe Street Pretoria, and during the meeting the manager
raised his concern regarding this previous conversation, in which it was stated that it was the
intention of Peega to expose SARS in the media. The manager also raised the issue of unethical
behaviour and attempted "blackmail". The manager requested further information from Peega and
his legal representative:
That the employee remain bound by the oath of secrecy of which a copy was handed over
• Should the employee consider proceeding with the media that Peega consider the safety of
his colleagues as they were investigating organised crime syndicates.
• Should they intend engaging the media that they formally inform SARS to enable SARS to
put contingency plans in place, to protect employees that may be endangered by such
exposure. The legal representative responded that she was merely acting on instruction of
her client Peega.
Both of the above incidents are contained in affidavits obtained from witnesses at the time
The report suggests that sources were paid with funds from "clients". This is not true. The SARS
annual budget makes provision for a line item "informant rewards", and such rewards are paid for from
a central point in SARS and are subject to very strict controls.
The suggestion that a secret account was managed by the unit is totally unfounded as SARS does not
operate in this manner.
SARS response:
In respect of this paragraph, it would be improper for SARS to get drawn into a debate of a personal
nature concerning managers at SARS. Suffice to say that Peega (who is believed to be the author)
never interacted with the Deputy Commissioner, Ivan Pillay or with the former Commission and now
Minister Gordhan. Secondly the suggestion that state of the art equipment was purchased by SARS
for this unit is false.
Extract from "dossier"
1)
stays inaøt
Status of group
Any activity
is against polIcy end regulations
Any change must take place in the design, we era discussing
the
Admjrilstratjvo
o
Vehicle claIms, study
leave, changing of bankinij particulars
Oparnucnaj
'Rules of play" document was an informal document compiled by the manager of the unit which
was intended to address rumours and fears that came about in the unit during a time that SARS was
changing its operating framework. Bullet I confirms the cost centre, bullet 2 was to ensure the
members and their family's safety and that their names would not mentioned, the rest of the
comments relates to the job security of the NRG members in SARS and that the work they engaged in
was important to SARS, bullet 3 was an attempt to bring about some order in the manner in which the
unit dealt with administrative issues bullet 3 (operational issues) was to reaffirm that the project
,
required authorisation, page 7 is about ethics and legality relating to the projects of the unit and page
8 is to ensure adherence to SARS' operational management system. The last point on page 8 was
intended to ensure that one of the members of the unit who had left would not be inadvertently
exposed to information in SARS by members of this unit.
G
JOHANNESBURG, 2 MARCH 2016- The public statements today by the Ministers of Police and State
Security on investigations by the Hawks into investigative units at the South African Revenue Sewice
(SARS) is a violation of our rights to dignity and reputation.
We are left with no other option than to seek legal advice and to take appropriate action to defend
ourselves. To date, all investigations that have been instituted against us, either by SARS or other
state institutions, have never afforded us a fair opportunity to be heard or to have our side of the
story represented.
Allegations that the investigative units in SARS were unlawful and illegal, operated front companies
including running a brothel, bugged President Jacob Zuma, spied on taxpayers and entered into ille-
gal settlements for tax disputes, gave certain taxpayers preferential treatment, infiltrated taxpayers,
broke into homes and planted listening devices and the like, are all false and unsubstantiated.
In addition, the allegation that SARS, during our time as managers, purchased and used sophisticated
spyware is false and unsubstantiated.
They did not announce or mention which law has been breached or the specific breaches that the
Hawks are investigating;
They ignore the assertion that was made by the Minister of Finance, that the National Research
Group (NRG) and other investigative units at SARS were established lawfully, with ministerial
approval, operated within the SARS legal and policy framework and generated significant tax reve-
nue for South Africa.
The Ministers of Police and State Security have sought, among others, to rely on the Sikhakhane
report which is flawed in fact and in law, and is eminently challengeable, and the Kanvane report,
Which bears no relevance to the lawfulness Of or not Of the investigative units in SARS.
We reiterate again: The NRG, and subsequent investigative units in SARS, were legally constituted
and did admirable work to disrupt activities in the illicit economy. Its finances were approved trans-
parently in the normal way Of SARS budgeting processes and was audited by the Auditor General
every year.
SARS, during our time as managers, ensured at all times that the NRC and subsequent investigative
units functioned within SARS legal and policy framework and within the laws of our country.
1 684
131.18
• The above spreadsheet reflects equipment purchased between July 2009 and July 2014.
• As stated earlier in the presentation, this list may not be exhaustive, and that additional information may still be found within the procurement
division of SARS.
• Accordingly, efforts are currently underway to locate as much information as possible in this regard.
• The above spreadsheet does however, provide a sense of the extent to which this Unit, under the guise of ACAS, went about in procuring
security-related technology and assets.
"1
Background
On 27 June 2013 counsel for the South African Revenue Service (SARS), addressed a letter to Mr Jul-
ius Malema and his legal representative, cautioning Mr Malema to refrain from making false public
statements about the state of his tax affairs and his engagements with SARS.
SARS is still involved in various aspects of litigation with Mr Malema and entities associated with
him. Mr Malema was afforded a period of 48 hours to rectify the following false allegations-
• That there was an agreement in principle between him and SARS to repay outstanding tax
liabilities and that the agreement was breach by SARS due to political interference
• That a request for a compromise was declined by SARS due to political interference
• That SARS was part of a 'concerted effort" to discredit Mr Malema and caused the farm
Schuilkraal to be sold to remove all means for Mr Malema to generate an income.
In subsequent weeks, Mr Malema has not only refused to correct his lies, he has in fact repeated such
allegations in various news interviews.
Normally SARS would prefer not to allow legal and other processes of engagement with taxpayers to
be side-tracked by questionable public campaigns in the media. SARS would also prefer to rather
make its case before the relevant legal platforms at appropriate times instead of getting involved in
public spats with non-compliant taxpayers. SARS considers the public comments made by Mr Malema
and reported on by the media as a serious threat to the integrity of SARS, that it is necessary to
respond.
SARS has therefore invoked Section 67(5) of the Tax Administration Act which allows SARS to dis-
close taxpayer information that would otherwise be treated as confidential, in order to disprove false
allegations made against SARS and its processes.
SARS is a state institution and subject to the Constitution and the Bill of Rights. SARS seeks to apply
the tax and customs laws it administers with fairness, in a transparent and even-handed manner
without any external influence.
No single person in SARS can decide who to investigate, who to audit, who to settle tax debts with
and who not to. Case selection for further investigation or audit is subject to oversight from various
mechanisms - committees with governance rules exist to consider and execute certain activities. All
these committees exist by statute, policy or governance mechanism and have very clear rules. They
comprise of persons with the requisite knowledge and expertise and are themselves subject to over-
sight mechanisms.
SARS is a semi-autonomous public institution with specific statutory obligations. SARS has consist-
ently conducted its work independently and in a non-partisan manner that does not allow for exter-
nal interference. It is an established principle that the Minister of Finance, the Deputy Minister of
Finance nor their respective offices involve themselves in the affairs of any taxpayer, particularly in
instances where there is a dispute between SARS and a taxpayer.
An analysis of Mr. Malema's interaction with SARS in public records (media statements, interviews
and records before will demonstrate the following:
2. In July 2011 Mr Malema publicly invited SARS to audit his tax affairs. He claimed that his tax
affairs were in order. In recent media interviews he has suggested that he approached SARS at the
start of the process that has led to his predicament now. This is not true.
During 2010 SARS made contact, on its own accord, with Mr Malema after he had failed to submit his
tax returns for a number of In accordance with SARS's general procedures he was afforded a
reasonable opportunity to make good on his tax obligations and submit outstanding returns.
On the insistence of Mr Malema, SARS attempted to resolve the matter within a month. It should be
noted that Mr Malema was represented by lawyers and accountants and a Chartered Accountant from
the very first interaction. At a later stage his representative team was broadened to include a legal
firm and a member of the Johannesburg Bar Council. Far from complying and resolving his tax
affairs within that month, every single time since then, a delay occurred on his
Responses in respect of outstanding returns were only received when SARS repeatedly requested
such information over many months. At no stage were any responses to SARS at the initiative of
Malema or his It took him a period of more than 18 months to file his outstanding
Ultimately he failed to regularise his tax affairs.
3. In relation to the trust under Mr Malema's control, even after a number of requests from SARS, he
still has not registered it for tax purposes.
4. Neither of these situations - his personal income tax affairs and that of the trust - was helpful in
demonstrating his willingness to comply with his tax obligations. Such situations do not only speak
to the failure of Mr Malema to comply with his statutory obligations, but also the fact that it is not
fair for SARS to treat one taxpayer different from another.
5. After eventually receiving the outstanding tax returns, on analysis of the information at SARS's
disposal, it became evident that Mr Malema submitted inaccurate information to SARS for the tax
years 2005 to In respect of the trust under his control, the same was found to be the
All indications were that Mr Malema was attempting to restructure his asset holdings without
informing This situation left SARS with no alternative but to launch a financial investigation
into his tax
a. At no stage was the Ministry of Finance, the Commissioner or Deputy-Commissioner for SARS in
any way involved in the operational aspects of the investigation, nor the decision to commence with
the financial investigation. This investigation was conducted in the ordinary course of SARS's busi-
ness.
b. The matter was assigned to the Financial Investigations team, who's Senior Manager at the time
was an African male. Since then, even though line managers have changed over time, the new senior
manager responsible for the unit is an African male. The project leader, a white male reported to
these managers throughout. Two lawyers were designated by SARS to participate in the case, of
which one is a white female and the other is an African male. The primary financial investigator in
the case is a white female. The suggestion that particular racial groups are "conspiring" against Mr
Malema is ludicrous.
b. Mr. Malema under-declared and mis-declared income in the years 2005 to 2011 and was assessed
for an amount of approximately R 16 million;
d. Mr Malema failed to submit the tax returns for the Ratanang Trust;
e. Whilst Mr Malema was engaging SARS, he was transferring assets he owned to third parties in a
clear attempt to shift assets outside the reach of
7. Once assessed, Mr Malema failed to pay his tax that was due on the required date. He remained
unresponsive to several attempts from SARS to get him to pay. It left SARS with no alternative but
to obtain a default judgment for debt against him. Mr Malema, despite having had the opportunity to
do so, failed to challenge this This judgment led to the Sherriff of the Court to attach
property in his name. Only at the stage when this occurred, did Mr Malema engage SARS with an
offer to settle.
a. It is important to note that a taxpayer at this juncture has several options open to him/her. He/she
can object, appeal and take his/her dispute up along the hierarchy of Courts in the legal system. Mr
Malema did submit an objection. His objection was denied. He chose not to appeal this
b. An alternative for a taxpayer at this stage is then to consider making an offer to settle. Tax settle-
ments are guided by law and not by the whims and decisions of individuals in SARS. There are no
"special deals" for certain types of taxpayers because of their status in society, despite the sugges-
tions made by Mr Malema. He stands misinformed if he believes this to be the case. In fact, to the
contrary, SARS has committees who consider these offers that convene on a weekly basis. Neither the
Minister of Finance, the Deputy Minister of Finance nor the Commissioner or Deputy-Commissioner
for SARS, or any other manager for that matter, can influence decisions by these committees. The
considerations applied at the committee meetings are prescribed by statute and are recorded, A tax-
payer either qualifies for settlement or does not.
c. A requirement for a settlement to be considered isthat the taxpayer must make a full and frank
disclosure of his/her financial affairs. Another requirement is that a taxpayer must truthfully dis-
close all his assets and liabilities, including those held on his/her behalf by third Settle-
ment offers pass through a settlement committee.
[171
d. In Mr Malema's case, his offer was rejected and the reasons for this were put to him.
8.Mr Malema never made any attempt to pay any amount or portion thereof towards his tax debt.
This left SARS with no alternative but to allow the Sherriff of the Court to continue with the sale of
his possessions, in order to satisfy his tax In addition, because of the risk of dissipation of
assets, SARS obtained an order of Court, preventing Mr Malema from further dissipating It
was at this stage that SARS learnt that the National Prosecuting Authority with the Asset Forfeiture
Unit had already submitted a claim over the Schuilkraal farm. For that reason SARS relinquished its
claim over the farm.
g. Through several act Mr Malema demonstrated that he is either unwilling or unable to pay his tax
debts. It left SARS with no alternative but to institute sequestration proceedings against
hough having indicated his intention to do so, Mr Malema has yet to oppose this application.
CONCLUSION
As outlined, the behaviour demonstrated by Mr Malema has shown a consistent disregard for his
obligations as a taxpayer. This is not the sort of behaviour the millions of honest taxpayers in this
country should condone. His non—compliance is purely a tax matter - it has nothing to do with past or
current political processes in the country.
• Mr Malema failed to register as a taxpayer and consistently failed to submit income tax
returns honestly and on time.
• He has until now failed to register his trust for tax purposes. SARS had to register it on his
behalf
• Ultimately when SARS reached a conclusion of how much tax Mr Malema owed SARS, and
despite him having had, by his own account at least R 4 million available at the time, he
opted not to pay one cent towards his tax debt.
• He accepted that he owed SARS R 16 million in tax, but he did not offer to convert any of his
assets towards his tax debt.
• He did not request any form of payment arrangement. Instead, he attempted to dissipate
assets beyond the reach of SARS.
Mr Malema failed the procedural requirements to qualify for a settlement for tax debt through his
own design, and not because "somebody decided" so. Mr Malema must, as we all do, face the conse-
quences of his actions. He had ample opportunity to utilise the various mechanisms provided for in
law to state his case.
He opted in other instances not to pursue the matters through the legal process. To attempt to politi-
cise his predicament and attack a state institution is behaviour that cannot be condoned in a free,
open and democratic society.
Footnotes:
L4J Sequestration application - indexed number page 13 para 27, 28, 29, onwards
Sequestration application - indexed number page 9 para 16
Sequestration application - indexed number page 13 para 27, 28, 29, onwards
Sequestration application indexed number page 13 para 27, 28, 29, onwards
LiiJ Sequestration application indexed number page 13 para 27, 28, 29, onwards
1161
Sequestration application - indexed number page 21 para 58, 59 and number 22 para 64
The decision by the South African Revenue Services to reveal the well-known details of my dealings
with them as a response to my public utterances about the unethical conduct they displayed towards
me is further proof of their increasing moral bankruptcy. All the information they revealed is not
new to the public or even newsworthy, the fact that the details compare favourably with previously
leaked information serves as proof that the leaking was by SARS. Otherwise, if it had been an inven-
tion of the press there would be contradictions. It is disappointing that instead of explaining the
unethical conduct SARS has made this about my tax affairs.
It should be noted that this is SARS' way of intimidating the public and any tax payer who will want
to criticize them in future. This is precisely because they told themselves that they beyond reproach
and sacrosanct, and that anyone who dares to criticize them will be intimidated into silence; that is,
they will use the privileged information they have about such a person to silence him\her. Neverthe-
less, such an act of cowardice will never work with me.
I will fearlessly and without any fear of contradiction respond and correct the distortions that SARS
has made regarding my dealings with them. I will show that they are merely furthering a political
agenda against me, and to that extent, through their latest statement they have proved beyond any
reasonable doubt that they are a branch of ZANC.
The history of my interaction with SARS started when the so called "intelligence dossier" was
brought to my attention by an anonymous source whilst I was president of the ANCYL and we (in the
ANCYL) then chose to expose it to the public. I then received a letter from SARS requesting my per-
sonal information relating to SARS matters immediately after releasing the dossier to the public. I
interpreted this as an act of intimidation but gave it the benefit of doubt. Following this, a meeting
was convened between me and SARS officials, in which my lawyer and accountant, the SARS commis-
sioner and his deputy, with an additional staff member from SARS by the name of Van Loggernberg
were present.
In this meeting, my personal tax matters were briefly discussed in the presence of all, My lawyer and
accountant, together with Mr. Van Loggernberg were then requested by the Commissioner to excuse
themselves from the meeting and an indication was given on their departure that Mr. Van Log-
gernberg will be helping us to resolve my issues. I then remained behind with the Commissioner and
his deputy.
In this closed session between the three of us, the details of the "intelligence dossier" were
cussed, and in what looked like their defence I was told that Mr. Jacob Zuma had a similar
problem and they helped him with it, Mr. Pillay in particular told me that he had helped Mr. Zuma
and that to their disappointment Mr. Zuma took two years to resolve his problems, which even ran
into his presidency of the republic.
It honestly puzzled me as to why senior SARS officials would discuss another taxpayer's matters with
me because it means they could do the same to me and that is unethical. Nevertheless, they both
offered to help me with my tax matters because they have done it before with Mr. Zuma and other
comrades. Mr. Pillay added that they would do this also because both of them are comrades and that
he in particular was from exile.
We then agreed that I must join my lawyer, my Accountant and Mr. Van Loggernberg who would
then take the mater forward, which I did. Mr. Van Loggernberg also invited a second employee - a
white lady whose name I can't recall. It was then agreed in that meeting that within a month I should
have made submissions of my tax returns, The lady in question was to then help my accountant in
that regard.
It is therefore noteworthy that if SARS is on an honest route of revealing my engagements with them
they should also reveal this closed meeting with the Commissioner and his deputy in which we had
this private conversation. But SARS is not interested in an open and honest deliberation about my
engagements with them expressly demonstrated by their deliberate omission of these details and I
challenge them to do so.
Following this meeting, my personal tax income returns were filed and payment was made to that
effect. When attempts were made to pay for the Trust, we were told we could not pay as the Trust
was under investigation. This is therefore what caused delays, even when the personal tax matter
had been settled. It is worth noting that the Ri6m assessment in question is not regarding my per-
sonal income, but that of the Trust. However, they would insist that they can't charge the Trust
directly as the assessment is taxable in my own hands.
There was never an attempt from me to restructure my assets so as to hide them from SARS. I have
always been honest with SARS in disclosing my assets to them. This is a usual allegation which they
have made for a long time, to the extent of establishing special inquiries where they investigated my
close friends and relatives with an attempt to expose hidden assets, yet without success. In essence,
to this day SARS found no evidence, even after spending millions of state resources, that I have hid-
den any asset from them,
I publicly challenge SARS to expose any hidden asset which they discovered during their expensive
processes of investigation that have included spending large sums of money on inflated white legal
teams and Afrikaner Senior Counsels amongst other things. I further challenge SARS to tell the public
how much they have spent on these inquiries around my friends and family, including me. Also, how
much they have recovered from all of this thus far, so that we can determine if there is value for
money, or that they are just spending tax payers' money to settle political differences and perpetuate
racial hatred.
SARS has now established an enquiry with the same intent, and I want to categorically sate that
there is no need to spend more government resources as they have taken everything I have; that is -
all of my assets!
I must add that the ANCYL, following the appointment of ministers by President Jacob Zuma, raised a
concern that the African leadership was not considered when appointing the economic cluster of cab-
inet, particularly in the Ministry of Finance. A matter Mr. Gordan took very personal and has since
then used his power\influence over SARS to fight his political battles by manipulating the reputable
institution of SARS. He is well known in the congress movement to be a very vindictive person. Even
during his days in the UDF, Mr. Gordon belonged to an Indian cabal that often destroyed comrades
who disagreed with them.
However and unfortunately, the debate about African representation in the economic cluster of the
cabinet got reduced between ANCYL and Mr. Gordan. I particularly remember a meeting between the
ANCYL and the ANC where Mr. Zuma tried to explain the appointment of the economic cluster, and
the whole discussion got reduced to one appointment - that of Mr. Gordon. Mr. Zuma also indicated
that he did not know Mr. Gordon very well, except that he used to belong to an Indian cabal during
the days of the UDF.
It was then clear to me, to our disappointment, that a political procedural matter got reduced to a
personality. Mr. Gordon has therefore always had intention to make us pay back, and the fundamen-
tal differences in strategic vision of the movement that we in the ANCYL held, made him keen to par-
ticipate in silencing us with the hope to delegitimise our course.
The letter requesting the suspension of payment written on the 13 June 2012 to allow further engage-
ment is but an example of a willingness to resolve the matter on my part, even before the attainment
of the warrant of execution which was only issued in October 2012. To therefore suggest that we
started acting after seeing the execution order is misleading, to say the least. It should be noted that
not going to the court was because deliberations with SARS top officials had created an impression
that an amicable solution would be found and equally it had proven to be an expensive exercise to
approach the courts.
The argument that one did not use options available to him, including going to court should not
translate into the fact that one had accepted such findings. In essence, the principle is that not
appealing decisions in the hierarchy of courts should not be taken as admission of guilt. For me, it
meant I did not have resources to do so, but also hoped on the amicable resolution. Ultimately, I
made an offer for settlement and a full and honest disclosure of assets. I must emphasise that to this
day SARS has failed to explain what it means by my "failure to make an honest and full disclosure" of
assets, to which they have insisted and dedicated resources to investigate, regardless of being met
with failure.
I approached comrades who were willing to help me to make an offer of R5m to SARS on condition
SARS was willing to settle. Coincidentally these were the same comrades that helped Mr. Zuma with
his problems with SARS. These comrades indicated that I must even disclose their names to SARS,
but SARS was unwilling to engage in such an arrangement.
I had a meeting with the Commissioner and his deputy earlier in October where they repeated their
willingness to help; they also repeated, once more, that they had helped Mr. Zuma. However, this
time, Mr. Oupa Magashula was very uncomfortable in talking about Mr. Zuma and made an attempt
to put Mr. Zuma's issue in a different context which will not be seen to be a special favour done to
Mosholozi. However, his deputy continued with the same line of having helped Mr. Zuma because
they are comrades and always willing to intervene. I indicated that I did not want a special treat-
ment, it be negative or positive. That day, the Commissioner even made me sign a confidentiality
form from SARS, but since there's no confidentiality between me and them anymore I have opted not
to respect that form.
We then agreed in that meeting that I should request a formal meeting with SARS which will formal-
ise some of the agreements of our meeting, hence the meeting with SARS officials later in October. It
is noteworthy that the "honest" SARS does not reveal this part when dealing with what they call "The
history of Mr Malema's interaction with SARS" and I challenge them to do so.
In the meeting with SARS officials I was told that they fully understand my financial difficulty and
they were willing to help because the matter had dragged for far too long at that point. An under-
standing was reached that I should first accept the debt of R16m before and then I will be helped to
get a compromise. This is because if I did not accept the debt of R16m, SARS would have not even
entertained my request for that compromise.
I particularly remember SARS' white Senior Counsel trying to caution them that they cannot speak
like that on matters that have potential to go for litigation, but SARS officials insisted that this is how
we are going to proceed. It was even agreed in that meeting that the letter of compromise will first,
before being given to the compromise committee, be sent to them to check if it meets the standard
requirements, such that in case it does not, they would help to redraft.
I was then asked to speak to Minister Mbalula and Mr Lebogo, the then Limpopo Provincial Secretary
of the ANCYL, to refrain from publicly attacking SARS because they were making it difficult for the
matter to be settled amicably. I was thanked in the same meeting for having not attacked SARS pub-
licly and I accordingly and immediately spoke to these comrades after the meeting.
Following this meeting, it must be noted that I honoured my part of the bargain, i.e. accepted the
Ri6m assessment (which I disputed throughout and still do to date), made an offer of compromise,
spoke to the two comrades, Mbalula and Lebogo. But SARS has not done the same on their part. Once
more, the 'Thonest" SARS does not reveal this part when dealing with what they call "The history of
Mr Malema's interaction with SARS" and I challenge them to do so.
As per agreement, I wrote the compromise letter accepting the R16m assessment in a meeting with
SARS Officials. That first letter had more pages and raised many issues including reminding them
that they told me that SARS has handled matters like mine before including that of Jacob Zuma. And
as promised they came back to me and said my letter raises many unnecessary issues. They said I
should write a brief letter and gave advice on its structure. I then wrote a letter withdrawing the ini-
tial letter of compromise and then submitted a brief version as advised by SARS officials. Once again,
SARS seems to be experiencing amnesia on this part, because they have deliberately omitted this
interaction in their public statement. I challenge them to dispute it.
SARS promised to come back to me within 3 weeks, but the so called efficient SARS then came back
to me in January i.e. in nearly three months after my submission. Coincidentally, it was after the City
Press published a story about my farming activities and showed a picture very good looking cabbages
on the Sunday after the ANC January 8, 2013 rally held in KZN.
This apparently angered the minister of finance, Mr Gordon, who then summoned the legal repre-
sentatives of SARS and officials to his office and asked them as to what was Melema still doing in his
farm because to his knowledge that farm was taken by SARS. Following that meeting, a letter of
rejection of our offer of compromise was sent to us claiming that we have not done a "full and honest
disclosure" something we are still waiting to hear its substantiation. SARS then started the execution
of properties immediately.
To set matters straight, SARS is lying when saying that there was an African at some point who dealt
with my matter. My matter with SARS was dealt with by an Afrikaner, from the first day I met with
SARS, to the last. As indicated earlier, following my meeting with the Commissioner and his deputy I
was then referred to Mr. Johan Van Loggenberg. After Mr. Van Leggenberh, we dealt with a certain L
Van Esch, then later Mr. Pieter Engelbrecht who then referred us to their lawyer A Wessel. A Wessel
then appointed a curator called Cloete Murray who appointed his attorney Wim Cilliers, who has now
appointed a senior counsel Swart.
I am raising all these Afrikaner names to demonstrate that there is an Afrikaner institutionalised
political and racist onslaught against me due to the views I hold about the direction of our country.
In addition to this, Mr. Gordon's and Mr. Pillay's Indian clique took advantage of the situation and
used it to settle political differences through manipulation of the noble institution in defence of their
politically corrupt principal, Mr. Zuma, who has lost all moral legitimacy as a leader and citizen. We
must not forget that SARS is, like all institutions of government, prone to corruption; and Mr. Oupa
Magashula is a living example and case in point.
My activism against abuse of state institutions does not start now, Ironically I defended President
Zuma when it was clear that state agencies, namely Scorpions and SARS were used against him by
his political rivals. Needless to state the on-going fiasco around the so called Zuma tapes, this is a
clear indication that my activism is not that of self-preservation, but a defence of our hard fought
freedom and constitutionalism. We must never as citizens lay back and watch politicians reduce our
glorious achievements to a shame state.
Finally, if SARS thinks it will use sequestration to delegitimise me politically, then they must think
twice because I'm not obsessed with holding public office or being a director in any of the private or
public institutions. Mine is an unmovable interest in the African Revolution; and for this to happen it
does not need me to hold public office; it is about South Africans, Africans in particular reclaiming
their dignity and total economic emancipation in our lifetime and with or without sequestration I
shall fight until victory is attained SARS should know that I'm not one of the cowards they silenced
before, I remain unshaken not even death can change my political views. Now or never victory is cer-
tain.
Statement issued by Julius Malema, Commander-in-Chief of the Economic Freedom Fighters', August 4
2013
SARS Home> Media> Media Releases > 26 May 2014 - Compromise agreement offer with Mr JS Malema
26 May 2014— The South African Revenue Services (SARS) welcomes the fact that Mr Julius Malema has acknowledged his faili
BARS accepts Mr Malema's commitment to ensure that he remains compliant in the future and views the process as ongoing, in respect of
ax years 2011 and 2012 will follow. The sentiments and apology expressed in the public statement released by Mr Malema are also welcoi
)n 10 September 2012 SARS obtained a civil judgment in the Gauteng North High Court confirming an outstanding tax debt of Mr Malema
nterest accruing, the amount has increased to R18 million. On 10 February 2014 the Gauteng North High Court granted a provisional sequ
Ihe return date for confirmation of a final order was set for 26 May 2014.
vir Malema made two prior offers to compromise that failed the statutory requirements for such offers to be considered favourably. Mr Male
)rder for the compromise to be considered favourably, including making a full and verifiable disclosure in respect of his assets and liabilities
with payment arrangements as agreed, in terms of the approved compromise agreement, the provisional sequestration order as v
n place.
BARS will not be bound to the compromise and the final sequestration order will be brought into effect in the event that—
• It is found that Mr Malema has failed to disclose a material fact relating to his settlement
• In the event that he has supplied materially incorrect information
• Or if he fails to comply with provisions or conditions contained in the agreement.
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