South Africa’s Gordhan Says Special Tax Unit Wasn’t ‘Rogue’

  • Unfair that people lost jobs because of wrong perceptions
  • Prosecutors said investigation into unit at advanced stage

South African Finance Minister Pravin Gordhan said the special investigative unit in the tax agency that police are investigating him for setting up acted within its mandate and it’s unfair that people lost their jobs because of perceptions the division was illegal.

“I am not rogue, nor was there a rogue unit,” Gordhan said in a speech late on Tuesday in Johannesburg. “It’s unfair, it’s unjust and it’s just plain wrong” that other former tax officials like Ivan Pillay, Johann van Loggerenberg and Adrian Lackay have lost their jobs because of concern they were acting outside their mandate, Gordhan said.

QuickTake South Africa

The investigation and possible charges against Gordhan have knocked the rand and bonds, adding to political instability in Africa’s most-industrialized economy. Chief prosecutor, Shaun Abrahams, said Monday investigations into the specialized tax unit are at an advanced stage. Abrahams last week dropped fraud charges against Gordhan, Pillay, a former deputy commissioner at the Revenue Service, and former Commissioner Oupa Magashula over allegedly wasted spending related to Pillay’s early retirement.

Pillay, Van Loggerenberg, a former group executive for tax and customs, and former spokesman Lackay resigned from the Revenue Service early last year as the agency was probing the allegedly covert unit. Lackay has since taken his former employer to the Commission for Conciliation, Mediation and Arbitration for constructive dismissal.

Gordhan, opposition parties and civil-society groups say the investigation is politically motivated and comes amid a tussle between the National Treasury and President Jacob Zuma over the management of state companies and the national tax agency, and the affordability of nuclear power plants the president wants to build.

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