The police’s Directorate for Priority Crime Investigation (the Hawks) accuses Finance Minister Pravin Gordhan of acting corruptly by granting early retirement to the former deputy head of Sars, Ivan Pillay.
In a letter sent by the Hawks to Gordhan on Monday, Major-General MS Ledwaba states that Gordhan’s alleged actions “amount to” unauthorised expenditure and/or fruitless and wasteful expenditure in terms of the Public Finance Management Act and corruption in terms of the Prevention of Corrupt Activities Act.
This is the first time it has been revealed that the law enforcement agencies are investigating Gordhan for corruption.
In his letter, Ledwaba writes that Gordhan (as finance minister) had “approved that then deputy commission of Sars, Ivan Pillay, could take early retirement at 56 with full retirement benefits” from 1 August 2010 and that his employer should pay his early retirement penalty to the amount of R1 258 359 “despite the early retirement being for personal considerations of the employee when ordinarily the employee must pay the early retirement penalty in terms of the law”.
Ledwaba says Gordhan also approved the reappointment of Pillay as deputy commissioner on a contract basis for a further three years.
The Hawks are further investigating Gordhan for the creation of an intelligence unit inside Sars.
In a letter by Gordhan’s lawyer Tebogo Malatji to the Hawks, the finance minister slams the Hawks’ claims as “unfounded”.
“The offence of corruption (under the Act) in the first place requires that the perpetrator ‘gives or agrees or offers to give to any other person any gratification’. The minister did not give or agree to give gratification to anybody. He merely gave official approval to the proposal of the commissioner that Sars allow Mr Pillay to take early retirement and be re-appointed.”
Malatji’s letter continues: “The giving of gratification in any event does not amount to corruption in itself. It is corrupt only if the gratification is given to the recipient ‘in order to act, personally or by influencing another person so to act’, in an unlawful manner.
“There has never been any suggestion that the minister approved the commissioner’s proposal that Mr Pillay be allowed to take early retirement and be re-appointed to persuade him to act unlawfully in any way.”
Gordhan believed “in good faith that the transaction was entirely lawful. It means that he in any event lacked any mens rea” (the intention or knowledge of wrongdoing that constitutes part of a crime).
Ledwaba asked Gordhan to appear before a Brigadier Xaba of the Hawks at 14:00 on Thursday. Gordhan has since refused to appear before the Hawks, saying he was under no legal obligation to present himself to the police.