These are the official charges Gordhan faces – and what lies ahead

The National Prosecuting Authority is going after finance minister Pravin Gordhan for signing off on an irregular early retirement process at SARS – with “rogue unit” charges expected to follow down the line.

The NPA has not completed its investigation into the so-called “rogue SARS unit”, but made it clear that it would be going after the finance minister for establishing an intelligence unit within the group, when it had no legal mandate or permission to do so.

In a media briefing on Tuesday, NPA head Shaun Abrahams read through the National Intelligence Act, showing that only the president of the country was empowered to establish intelligence units outside of the relevant intelligence structures.

SARS was not included in these structures, and with no evidence that written permission was given by former president Thabo Mbeko or current president Jacob Zuma to do so, the so-called “rogue SARS unit” was established in contravention of the SARS Act, Intelligence Act and the Constitution.

According to Abrahams, the investigation into the unit is still ongoing, though it is at an advanced stage.

Fraud charges

Further, Gordhan is facing action from the NPA on charges relating to former deputy commissioner, Ivan Pillay’s early retirement.

The NPA said that Pillay had sent a memo to former commissioner Oupa Magashula, indicating that he wished to take early retirement. Magashula then sent the request to Gordhan for approval of Pillay’s retirement – with full benefits, which was not applicable in Pillay’s case.

According Abrahams, Magashula was advised that the employee initiated severance package was not applicable to Pillay, but it was approved nevertheless. This improper early retirement process cost SARS R1.1 million, Abrahams said.

As soon as Pillay’s retirement was implemented, he entered into a 5 year contract with SARS, which was extended by Gordhan.

In light of this, Gordhan, along  with Pillay and Magashula now face the following charges:

  1. Gordhan, Magashula and Pillay – Fraud in respect of the R1.1 million pension payment;
  2. Magashula – contravention of the Finance Management Act;
  3. Magashula and Pillay – Fraud relating to the employment contract for 5 years;
  4. Gordhan and Pillay – Fraud relating to the extension of the employment contract.

Gordhan is expected to deliver his medium-term budget on 26 October 2016, thereafter he will appear in court with his co-accused on 2 November.

The rand meanwhile slumped on the news that the finance minister has been summonsed, losing more than 3% against the dollar to trade at R14.21 by mid-morning on Tuesday.

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These are the official charges Gordhan faces – and what lies ahead