Photo by: Duane Daws
The rand tumbled on Tuesday morning as the National Prosecuting Authority announced that it had issued a formal summons against Finance Minister Pravin Gordhan in the ongoing, politically-charged investigation into an intelligence unit within the South African Revenue Service.
NPA head Shaun Abrahams told the media on Tuesday that Gordhan and two other former top Sars officials were due to appear in the Pretoria Regional Court on November 2. The trusted finance minister and his co-accused will face fraud charges, he said.
Abrahams said the Hawks investigation into the Sars high risk investigation unit, was at an advanced stage and “at this stage is ongoing”.
Gordhan has been at the centre of the probe into whether there was a contravention of the Intelligence Act when the so-called rogue spy unit was established more than a decade ago to probe illicit finance deals.
Abrahams said the unit was established and was in operation as far back as 1999. He told media that former Sars official Ivan Pillay in 2007 sent a memorandum to then finance minister Trevor Manuel, asking for the National Intelligence Agency to increase its budget to cover the costs of the unit.
He said investigations revealed that Sars appointed people, outside of “normal processes” and these employees used false aliases, operated from their homes, the boots of their cars and coffee shops.
Abrahams said investigations had also shown that former Sars official Ivan Pillay’s early retirement with full benefits from September 2010 should not have been approved as he was subsequently employed on a five year contract from January the following year.
He said Gordhan had during the course of the investigation responded that he had approved this on the recommendation of former Sars commissioner Oupa Magashula.
Magashula, Gordhan and Pillay will be arraigned for the following: “fraud in respect of the R1,141,178 whereby the aforementioned persons had misrepresented to the government employment pension fund and to Sars that Mr Pillay was entitled to full pension benefits… whereas in fact the severance package was not applicable to Mr Pillay”.
Magasula will face a charge in relation to the contravention of the Finance Management Act as he allegedy allowed Sars to “incur unauthorised and wasteful expenditure” in granting Pillay the package.
Pillay and Magashula will face a further charge of fraud in relation to the employment contract of five years.
Pillay and Gordhan will face a further charge in relation to the extension of the employment contract.
Abrahams said the three accused were informed of the charges on Tuesday. It was reported that Gordhan was not at his home when the summons was served.
The rand fell more than three percent against the dollar in the wake of the NPA’s announcement, which Abrahams prefaced by rubbishing Gordhan’s recent claim that the probe was mere “political mischief”.
Gordhan has been targeted by the Hawks since his re-appointment to the finance portfolio late last year, with the unit demanding days before he delivered the national budget in February that he answer a list of questions relating to the intelligence unit.
The investigation has been described by observers as an attempt to destabilise him in a battle over state funds.
The African National Congress on Tuesday urged the minister to respect the summons, adding that the probe and speculation about the motives behind it has had a damaging effect on the country.
“This investigation and related, untested and mischievous ‘conspiracy theories’ has had a detrimental effect on the South African economy and we trust that today’s announcement will move us a step closer to uncovering the truth from facts and bring this matter to finality,” ANC spokesman Zizi Kodwa said.