International consultancy group Bain & Co said yesterday it has had its seminal moment and regrets being implicated in malpractice after Treasury announced its suspension on public sector work for 10 years.
Bain & Co said it was considering its options in response to this decision.
Treasury in a statement yesterday said the restriction effective September 5 until September 4, 2032 – for engaging in corrupt and fraudulent practices related to a SA Revenue Services (Sars) contract – had been published on the Treasury website and database for restricted suppliers. The restriction would apply to any other contract for services awarded to Bain & Co in the public sector.
Treasury said it was, in collaboration with Sars, “in the process of restricting Bain & Co’s South African directors through a phased approach”.
Bain has said that in the past 10 years, it had earned R196 million from government contracts in South Africa and that about 80 percent of those, about R161m, came from its work at Sars between 2015 and 2017.
The group repaid Sars back for its botched restructuring of the tax agency with interest amounting to R217m.
Earlier this year, the UK government suspended the firm from participating in public sector work for at least three years on the advocacy of House of Lords member Peter Hain, who is pursuing similar action to follow in the US.
Hain has previously said, “We are now asking the US government to do the same, I have contacted the ambassador to the UK (Jane Hartley) and I have been assured that the matter has been passed on to the administration in Washington DC. I hope President (Joe) Biden does the same.“
Bain though yesterday in a statement still laid the blame at the door of Sars for the selection criteria on the work it started doing in 2015, which resulted in its being implicated in tender manipulation.
Bain said there was no evidence proving that it had colluded with Sars, engaged in any corrupt and fraudulent practices, manipulated the procurement process in any way to exclude other bidders or specifically advantage Bain. It said this process was wholly run by Sars.
“We disagree with the ban and are considering our options in response to this decision. We had already reached out to various stakeholders, including Treasury and Sars, to engage in further dialogue. Despite this outreach, we were given no notice of or opportunity to respond to the restriction prior to its apparent implementation,“ it said.
Meanwhile, Bain SA, the South African branch of Bain & Co, said it deeply regretted the mistakes it made in the procurement and execution of the work with Sars between 2015 and 2017.
“We are embarrassed that this could have occurred in the first place and are angry that our work was used by others to damage a critical institution and South Africa.
“The new Bain South Africa leadership is determined to make sure that the events of the past can never be repeated. In line with the public commitment we made in our recent appeal for constructive dialogue, we will continue reaching out to key stakeholders to engage openly and honestly on a way forward. This includes doing what is required to restore our standing with the South African government and other stakeholders over time and to be a force for good in the country,” it said.