The British government has suspended Bain & Co. from public contracts in the UK for three years because of the role it played in corrupting the South African Revenue Service (SARS).
The suspension follows pressure from former UK MP Peter Hain, who argued that the global consulting firm must be held accountable for its role in state capture in South Africa.
In February, Hain wrote to UK prime minister Boris Johnson insisting that his government suspend all public contracts with Bain and bar them from entering into any new contracts.
Hain’s plea followed the Zondo Commission’s report that revealed Bain’s complicit involvement in money laundering and fraud through UK banks involving taxpayers’ money.
“The very company who possessed the expertise to bolster South Africa’s defences against the ravages of state capture weakened these defences and profited from it,” said Hain.
Consequently, the UK minister for government efficiency Jacob Rees-Mogg has now considered Bain to be “guilty of grave professional misconduct” after reviewing the evidence and conclusions of the South African Government Commission.
“This decision has been taken in light of Bain’s responsibility as a global brand for its South Africa division and the company’s failure to clarify the facts and circumstances of its involvement,” said a British cabinet office spokesperson.
Hain said Bain’s UK ban sends a clear message to businesses that there are consequences for unlawful, unethical, and unprofessional conduct.
However, Bain continues to operate in South Africa despite the Zondo commission’s conclusion that the firm acted “unlawfully” and colluded in “the clearest example of state capture”.
The Zondo commission found that Bain conspired and colluded with former president Jacob Zuma and former SARS head Tom Moyane to undermine the functioning of the revenue service in exchange for R164 million.
These findings followed the testimony of South African whistle-blower Athol Williams, whom Bain SA employed for over 20 years.
In his Zondo Commission testimony last year, Williams implicated several Bain associates that he claims worked with Zuma as they plotted to manipulate government systems, including SARS.
The commission deemed Bain’s involvement in SARS unlawful and referred them for prosecution.
The commission handed the report to president Cyril Ramaphosa at the beginning of the year, but to date, there has been no action against Bain.
Hain urged the South African government to follow the UK’s example and act against corrupt firms like Bain.
“The South African government can no longer continue to turn a blind eye to the brazen private sector corruption that took place under Jacob Zuma’s presidency,” said Hain.
Williams agrees with Hain and said that “the South African government needs to issue a black listing order on Bain for doing any public sector work.”
“I then call on the National Treasury, and companies like Sasol – who have hired Bain – to do the same”.
He added that the UK’s ban on Bain should be an embarrassment to the South African government and its inaction, as it has had this information for years.
Bain said it was disappointed and surprised by the UK minister for government efficiency Jacob Rees-Mogg’s decision.
“We will be responding to express our concern about the process and its outcome, where recommendations from the Cabinet Office were apparently overruled, and to address inaccuracies in the Minister’s letter,” it said.
“If necessary, we will consider other options for a review of the decision. In the meantime, we will continue to work with the Cabinet Office to ensure that we do what is required to restore our standing with the UK government.”
Bain added that it has apologised for its South African office’s mistakes in its work with the South African Revenue Service (SARS).
It said it repaid all the fees it received from the work, with interest, four years ago.
“Bain South Africa did not act illegally at SARS or elsewhere, and no evidence to the contrary has been put forward. Neither Commission of Inquiry in South Africa has recommended any charges to be filed,” it said.
“We have offered our full cooperation to the relevant authorities and will continue to do so.”