Business Maverick

Business Maverick

Ismail Momoniat: Bain must tell the ‘whole truth’ about its role

Ismail Momoniat, acting Director-General of the National Treasury. (Photo by Gallo Images/Financial Mail/Robert Tshabalala)

Treasury’s deputy director-general for tax and financial sector policy Ismail Momoniat said Bain & Company needs to disclose to SARS and Treasury its ‘internal investigation reports as well as all documents and communication’ after it drastically restructured the tax agency, weakening it during the State Capture years.

The National Treasury has responded to the surprise resignation of a Bain & Company local partner, who was tasked with cleaning up its public image, saying the consultancy firm needs to tell the “whole truth” about its role in the destruction of the SA Revenue Service (SARS) during the corrosive State Capture years.

Treasury’s deputy director-general for tax and financial sector policy Ismail Momoniat said the resignation of Athol Williams on Thursday 17 October – barely six months since he was appointed as Bain’s South Africa partner – is “welcome” and “long overdue”.

Momoniat, whose job at the Treasury involves overseeing the efficiency of SARS, said US authorities should investigate Bain, a Boston-based firm, under the country’s Foreign Corrupt Practices Act, for its role in the destruction of a once world-class tax agency during the reign of former commissioner Tom Moyane.

Momoniat’s call echoes that of civil society group Corruption Watch, which believes that Bain has not atoned for aiding and abetting State Capture after it was contracted by Sars to design and implement its restructuring between 2013 to 2018. Corruption Watch’s David Lewis believes the only remedy for Bain’s wrongdoing would be the criminal prosecution of the firm’s partners.

Business Maverick reached out to Bain for comment on Thursday after Williams resigned and on Friday 18 October after Momoniat spoke out about the former’s departure. The firm didn’t respond to both requests for comment.

Williams publicly announced his resignation at the Finance Indaba Africa, a conference attended by finance professionals in Johannesburg’s Sandton, saying Bain “withheld information about the restructuring of SARS and not being truthful about what it did in South Africa.”

He refused to elaborate on the exact information the firm allegedly withheld because it is “sensitive”. Read more here:

Williams, a University of Cape Town lecturer specialising in corporate responsibility and ethical leadership who was hired in May 2019 as Bain’s Mr fix-it, said he announced his resignation without informing the firm – effectively blindsiding it.

However, Momoniat believes Bain’s role in the State Capture story doesn’t end with the abrupt departure of Williams.

The work of Bain at SARS featured prominently at the Nugent commission of inquiry into tax administration and governance issues at the tax agency, which found that the firm restructured SARS in 2014, colluded with Moyane to weaken the agency and damaged its capacity to collect tax revenue.

The Nugent commission found that the Bain restructuring destroyed key SARS units, including its large business centre, legal and compliance units, and enforcement capacity.

“It (Williams’ resignation) is long overdue, as he must have known in December (2018) what the Nugent commission said on Bain, that it had chosen not to engage with the commission and was withholding meaningful information from it,” Treasury’s Momoniat told Business Maverick.

He added that Bain needs to disclose to SARS and Treasury “the whole truth and provide all their internal investigation reports as well as all documents and communication with all SARS officials during the 2013 to 2018 period”.

Over this period, Bain was awarded the tender that restructured SARS, earning it more than R200-million in consultancy fees plus accrued interest, which it has since decided to pay back as a remedy for its wrongdoing.

The Nugent commission also found that the former South Africa head and managing partner at Bain, Vittorio Massone, met former president Jacob Zuma at his homestead in Nkandla around 2013 at least 12 times and was informed that Moyane would be appointed as Sars commissioner before it was made public.

Momoniat said Bain also needs to disclose documents about the meetings Massone had with Zuma, Moyane, and others at Nkandla.  In September 2018, Bain said Massone had stepped down as its local managing partner but remained a partner for the group. BM


Please peer review 3 community comments before your comment can be posted