JOHANNESBURG — In a recent meeting I had with the top echelon at Hogan Lovells in South Africa earlier this month, I was given their side of the story regarding the drama that erupted over the firm’s controversial SARS probe into former employee Jonas Makwakwa and his girlfriend Kelly-Ann Elskie. Unfortunately, owing to the sensitivities of the issue at hand, I was asked by Hogan Lovells not to publish the full audio recording of my discussion with them. (I’m also not publishing their names at this stage without their permission.) But what I can say is that Hogan Lovells set out their side of the story in full. Because of client confidentiality with SARS as well regulations in the legal space in South Africa, Hogan Lovells told me that it cannot release its SARS probe to the public without the permission of SARS. However, the firm did indicate to me that it was hoping that after a parliamentary probe (which has now actually taken place today, Wednesday, May 23) that SARS and Parliament would actually allow for the Hogan Lovell’s probe to be made public. And after today it seems like that hope may come to fruition as I’ve been reliably informed that a (redacted) version of the probe will go public within the next 24 hours. We’ll be sure to publish it on BizNews once it’s released. In the meantime, below is a press statement that Hogan Lovells issued today. – Gareth van Zyl
Questions on Hogan Lovells report on MJ Makwakwa and KA Elskie
South African law firm Hogan Lovells today welcomed questions from Parliament on its 300+ page report on MJ Makwakwa and KA Elskie. Hogan Lovells’ South Africa Chairman, Lavery Modise, made the following comments:
“Anyone reading the report will see very quickly and easily that our investigation into the suspicious payments identified by FIC and made to Makwakwa was specifically limited to whether the payments were a breach of SARS internal policies and/or the Public Finance Management Act.
“Far from being a whitewash, the opposite is true as the report states that: ‘….the majority of the cash deposits and payments identified in the FIC report and highlighted therein as “suspicious and unusual” remained unverified.’ And that ‘the explanation tendered by Makwakwa in relation to the source of these deposits are not satisfactory.’ This leaves the door fully open to criminal investigation and charges by SAPS.
“The report makes it very clear that there was no clearing of Makwakwa of any acts of corruption or acts of money laundering or of tax evasion. Instead, and as I previously stated to Parliament, it notes that these areas are to be determined by the DPCI and SARS itself with PWC.
“It is also clear from reading the evidence in the report that Makwakwa, through his lawyers at Baker & McKenzie, consistently challenged the authority of our investigation in to his conduct as an employee of SARS and refused to provide the necessary evidence to support the source of many of the seventy five suspicious cash deposits identified by FIC.
“In no way did our report clear Makwakwa of employee misconduct. Rather, the report recommended that disciplinary action should be taken against him for failure to disclose private business interests, failure to obtain permission to undertake outside employment work for Biz Fire Worx, and failure to co-operate and fully assist his employer in an investigation.
“It was the SARS-led disciplinary tribunal conducted by disciplinary chair advocate Terry Motau SC that found Makwakwa not guilty on these charges and not Hogan Lovells.
“A number of politicians and campaigners have made extreme claims against my firm based solely on accusation and insinuation. They have claimed to have ‘evidence’ that we have colluded in state capture when nothing is further from the truth. With the publication of this report we expect those claims to stop immediately, an apology to be offered to us, and a significant public payment to be made by them to a charity in South Africa supporting victims of state capture.”