Ismail Momoniat, the acting head of National Treasury.
- National Treasury’s acting director-general has called on private companies to shun Bain & Co.
- The global consultancy has been banned from tendering for state contracts in the UK for three years.
- The State Capture Inquiry report found that Bain colluded with top officials to weaken the SA Revenue Service.
- Get the biggest business stories emailed to you every weekday, or go to the TIF News front page.
National Treasury’s acting director-general, Ismail Momoniat, has called on companies in the private sector in South Africa and internationally not to do business with global consultancy Bain & Co.
“In my view, what they did at SARS [the SA Revenue Service] is akin to treason,” Momoniat said on Wednesday evening.
His remarks follow a decision by the British government to bar Bain from state contracts for three years due to “grave professional misconduct” in South Africa.
Momoniat acknowledged it was a “challenge” for South Africa’s government to take similar action to that of the UK.
“I am well aware that because of state capture, many of our institutions have been too slow to investigate or act against Bain,” he said. “This is one of the reasons for our poor assessment by the Financial Action Task Force.”
Momoniat, named acting DG last month, said Treasury was working to speed things up.
“National Treasury is actively exploring how to accelerate the process with the SA government to take appropriate action against Bain.”
‘Disappointed and surprised’
The decision to ban Bain was made by UK Cabinet Office minister Jacob Rees-Mogg, the Financial Times reported. He wrote to Bain’s UK leadership to say the work it did for the SA Revenue Service had rendered its integrity “questionable”.
Bain on Wednesday said it was “disappointed and surprised” by the UK government’s decision.
“We will be responding to express our concern about the process and its outcome, where recommendations from the Cabinet Office were apparently overruled, and to address inaccuracies in the minister’s letter,” it said. “If necessary, we will then consider other options for review of the decision.”
The consultancy has repeatedly denied its South African team “knowingly” supported state capture. It said that it had repaid all fees, plus interest, that it had received for its work with SARS.
“Bain South Africa did not act illegally at SARS or elsewhere, and no evidence to the contrary has been put forward,” it said. “Bain did the SARS work in good faith with every intention of helping to make SARS an even better organisation.
The group said that while the Nugent and State Capture inquiries revealed “many mistakes, ” they found “no evidence of criminal behaviour”.
Bain and the State Capture Inquiry
Earlier this year, the State Capture Inquiry report found that Bain colluded with former SARS boss Tom Moyane and former president Jacob Zuma to “capture” the tax agency in a bid to weaken it.
“SARS’s investigatory and enforcement capacity presented a hurdle to those involved in organised crime, and was, therefore, a target for those engaged in state capture,” said the commission’s chair, Chief Justice Raymond Zondo.
Zondo recommended that authorities investigate all Bain’s contracts with South African departments for potential wrongdoing. Two weeks after the report was published, Bain stepped down from Business Leadership South Africa.
Momoniat also paid tribute to Lord Peter Hain – a former Labour Cabinet minister and anti-apartheid campaigner – for pressuring the UK government to bar Bain.
“Treasury supports Lord Hain and continues to work with other authorities to explore criminal charges against Bain in SA and the US,” he said.
Hain, who grew up in South Africa, said he was pleased with the UK government’s decision. Companies involved in state capture had to “feel the pain for the consequences of their corrupt and unlawful behaviour”, he added.
Hain and Bain whistleblower Athol Williams, who met with Rees-Mogg last month, have both called on South Africa and the US to take stricter action against the consultancy.
Williams – who briefly served as a partner on Bain SA’s oversight board before quitting and moving the the UK, citing safety concerns – said on Wednesday that South Africans should follow the British government’s example.
“They have rejected SA’s calls for justice, so now SA needs to reject them. I call on the SA government to ban Bain, and I call on every company currently working with them to terminate their contracts,” he said.
Williams said evidence showed that Bain US knew what was happening at SARS.
“Bain’s activity in SA wasn’t mere corruption, it was an attack on our democratic institutions. The US government should hold them responsible.”
Meanwhile, in an address to the House of Lords last month, Hain had said that Bain SA’s “shockingly shady behaviour” at SARS had been endorsed by its leadership in London and the US, where it is headquartered.
“I am asking that the UK government and the US government immediately suspend all public sector contracts with Bain and bar them from entering any new contracts,” he said.