A firm named as part of a possible money-laundering ring linked to SA Revenue Service (Sars) chief officer Jonas Makwakwa has been appointed to help Sars collect R16.6-billion in outstanding revenue, Daily Maverick reported on Tuesday.
An investigation by Scorpio revealed that New Integrated Credit Solutions (NICS) and seven other agencies were reportedly appointed by Sars to help it boost revenue collection. But a report by the Financial Intelligence Centre (FIC) from May 2016 found that R17-million had flowed through NICS and 12 other companies, and that R600,000 of this money found its way to the personal bank account of Makwakwa.
The FIC report ultimately led to Makwakwa's suspension. It reportedly recommended that there should be an investigation into whether the money "constituted payments of proceeds of crime arising from corrupt activities on the part of Makwakwa and other individuals and entities involved in these transactions". The FIC also said there should be an investigation into whether the flow of money constitutes money-laundering.
So NICS could form part of a criminal investigation, Daily Maverick reported, but it has still been awarded a massive Sars contract.
NICS chairperson Baker Maseko reportedly told Daily Maverick that he was being targeted by the media because his company was a "uniquely black debt-collecting firm".
Sars reportedly said NICS had provided services to it for over 10 years, long before Makwakwa was appointed to his present position.
Daily Maverick reported that, according to the FIC, the money-laundering ring possibly works like this: the department of water affairs and forestry allegedly paid R17-million to NICS in February 2015. The money then moved through 12 entities in less than a month.
Of that, R600,000 landed in the account of a company of which Makwakwa was once a director. The company then made three payments to Makwakwa.
In October 2017, Makwakwa was cleared of disciplinary charges brought against him by Sars and returned to work. He had been on suspension with full pay and benefits. According to Fin24, Sars said at the time that Makwakwa was cleared of wrongdoing by an outside legal opinion, by international law firm Hogan Lovells.
Following criticism that it cleared Makwakwa despite the FIC's report, Hogan Lovells later said it was not asked to investigate suspicious transactions flagged by the FIC, according to Fin24.
Meanwhile, Sars is expected to appear before Parliament's standing committee on finance on Tuesday to explain to MPs why Makwakwa was reinstated, eNCA reported. The committee previously criticised Sars for Makwakwa's reinstatement.