{"id":812189,"date":"2025-02-17T08:30:00","date_gmt":"2025-02-17T06:30:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=812189"},"modified":"2025-02-17T08:52:48","modified_gmt":"2025-02-17T06:52:48","slug":"major-firm-guilty-of-serious-offences-wants-a-comeback-in-south-africa","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business\/812189\/major-firm-guilty-of-serious-offences-wants-a-comeback-in-south-africa\/","title":{"rendered":"Major firm guilty of serious offences wants a comeback in South Africa"},"content":{"rendered":"\n

Bain & Co. is fighting a legal battle against South African finance and tax authorities after becoming embroiled in a corruption scandal. <\/p>\n\n\n\n

It wants to overturn a decades-long ban on doing business with the state.<\/p>\n\n\n\n

The case is about to enter its second year as it tries to rehabilitate its reputation in the country through efforts, including unpaid work for prominent business organisations.<\/p>\n\n\n\n

In the court documents, Bain admitted to \u201cmistakes\u201d at the South African Revenue Service (SARS). <\/p>\n\n\n\n

The agency’s restructure gutted it, damaging its ability to combat crime in an era of endemic government corruption under former President Jacob Zuma. <\/p>\n\n\n\n

Still, the consultancy said the legal provisions used to ban it were unconstitutional. <\/p>\n\n\n\n

The local unit of Bain \u201cknows and accepts that we must take our rightful medicine. We\u2019ve willingly done so to date,\u201d it said in papers. <\/p>\n\n\n\n

\u201cThat does not mean we should be supine in the face of unconstitutional and unlawful revenge measures that may erode the rule of law for everybody.\u201d<\/p>\n\n\n\n

Bain is just one of a number of international firms \u2014 including McKinsey & Co., SAP, KPMG, and ABB \u2014 that have seen their reputations tarnished because of links to state-corruption scandals during Zuma\u2019s rule, which ended in 2018. <\/p>\n\n\n\n

All have paid back fees or accepted fines in a bid to atone for the conduct of their employees.<\/p>\n\n\n\n

The Treasury has filed a notice to oppose Bain\u2019s application and will focus on the constitutional challenge, it said in response to questions. <\/p>\n\n\n\n

The tax agency has filed a similar notice and will respond to Bain\u2019s submissions in an answering affidavit in due course, it said in an emailed response to questions.<\/p>\n\n\n\n

The National Treasury banned Bain in 2022 because it \u201cengaged in corrupt and fraudulent practices\u201d related to a contract with the country\u2019s tax agency, it said at the time.<\/p>\n\n\n\n

The move came after a judicial commission tied it to illegal dealings during a restructuring of the revenue service, where Bain\u2019s recommendations saw senior staff ousted and investigative capacity destroyed.<\/p>\n\n\n\n

While Bain has said it\u2019s \u201cashamed\u201d of its role in destabilizing the tax agency, court papers show it blames \u201clapses in leadership\u201d and said its employees didn\u2019t knowingly partake in corruption or fraud.<\/p>\n\n\n\n

Its former South African head, Vittorio Massone, met with Zuma, contravening normal practice. He also met with the former president\u2019s ally, Tom Moyane.<\/p>\n\n\n\n

A commission of inquiry accused Moyane of wrongdoing before he became head of the tax agency. Both Moyane and Zuma have denied wrongdoing. Bain replaced Massone in 2018 and he has left the country.<\/p>\n\n\n\n

\u2018Sledgehammer\u2019<\/h2>\n\n\n\n
\"\"<\/a><\/figure>\n\n\n\n

Bain argues its blacklisting was a result of regulatory overreach by the Treasury and South African Revenue Service, and that the Treasury took the decision in terms of an alleged unconstitutional provision in the country\u2019s laws, making it procedurally unfair, the court papers show.<\/p>\n\n\n\n

It wants the court to declare clauses in acts governing state procurement unconstitutional and to set aside the Treasury\u2019s decision to ban it from government work as unlawful and invalid.<\/p>\n\n\n\n

\u201cThe sledgehammer that has been used to punish Bain SA without legal restraint is not a weapon that should lie in the hands of any regulator in a constitutional state,\u201d it said.<\/p>\n\n\n\n

In accordance with court rules, the tax agency produced a record of its processes. Bain is expected to supplement its papers further; after that, both the Treasury and SARS would be entitled to file answering affidavits.<\/p>\n\n\n\n

While Bain paid the tax office about R217 million, including interest it received for its dealings at the tax agency, it has struggled to restore its reputation in South Africa.<\/p>\n\n\n\n

It stopped bidding for state work in 2019. It has consulted for Sasol, the country\u2019s biggest company by revenue.<\/p>\n\n\n\n

\u201cSince our work with the South African Revenue Service, we have taken significant remedial actions, both locally and globally, to ensure such issues do not recur,\u201d Bain said in a response to queries. <\/p>\n\n\n\n

\u201cThis includes significantly strengthened governance for public sector engagements worldwide.\u201d <\/p>\n\n\n\n

The company took the legal action after its attempts to engage with the Treasury and SARS were ignored, it said.<\/p>\n","protected":false},"excerpt":{"rendered":"

A top management consulting firm is fighting a legal battle against the Treasury and SARS after becoming embroiled in a corruption scandal.<\/p>\n","protected":false},"author":59,"featured_media":812197,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9872],"tags":[21751,1850,3246,853],"class_list":["post-812189","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-bain-co-2","tag-bloomberg","tag-sars","tag-south-africa"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/812189","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/59"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=812189"}],"version-history":[{"count":4,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/812189\/revisions"}],"predecessor-version":[{"id":812216,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/812189\/revisions\/812216"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/812197"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=812189"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=812189"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=812189"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}