Bain withdraws membership from prominent business lobby group amid renewed State Capture furore

Bain & Company, the US-based management consultancy firm that has been ensnared in the State Capture project and faced backlash for destroying the SA Revenue Service (SARS), has withdrawn its membership from Business Leadership South Africa (BLSA).

Two commissions of inquiries (the Zondo and Nugent Commissions) have placed Bain at the centre of capturing, restructuring, and destroying SARS by colluding with the tax collection agency’s former commissioner Tom Moyane and former president Jacob Zuma. 

In 2014, Moyane awarded Bain the tender to restructure SARS’s operations, including overhauling its IT infrastructure and changing its organisational/governance structure. Bain’s restructuring destroyed key SARS units, including its large business centre, legal and compliance units, and enforcement capacity. About 200 senior managers were displaced, and several skilled employees left SARS, weakening its world-class capacity to collect tax revenue.

Part one of the Zondo commission report found that SARS was a clear example of State Capture and how the private sector colluded with Zuma “to capture an institution that was highly regarded internationally and render it ineffective.”

Since the report was published in early January, BLSA, a business lobby group, has been trashed for retaining Bain as a member and not taking action against the company in light of the damning findings against it. As a member, Bain regularly paid fees to BLSA. 

BLSA, which is a business body representing more than 70 of the country’s largest companies, recently brought Bain back in its fold. After Bain’s involvement in the erosion of SARS was brought to light by the Nugent Commission in 2018, BLSA immediately suspended the company as a member. But three years later, BLSA reinstated Bain’s membership. 

BLSA CEO Busi Mavuso has defended Bain’s reinstatement, saying that the firm has since taken steps to reform its governance processes, including, among other things, launching an investigation into its work at SARS and firing its former managing partner in SA, Vittorio Massone. Massone was also found by the Nugent Commission to have engineered the erosion of SARS, along with Moyane and Zuma. 

Bain’s non-apology apology 

On Tuesday 18 January, Bain didn’t give reasons for its sudden withdrawal from BLSA. 

The firm said it accepted “through various lapses in leadership and governance” that it became an “unwitting participant in a process that inflicted serious damage” on SARS.  Bain apologised for this but has again doubled down as it denied participating in or enabling State Capture.  Although Bain said “mistakes” were made in its work at SARS, it remains confident that it “not in any way wilfully or knowingly support State Capture at SARS or elsewhere.”

Bain has also criticised the Zondo Commission’s evidence-gathering process. 

“The report relies heavily on the account of one individual who admitted to having ‘no first-hand knowledge’ of Bain’s work at SARS in his affidavits and testimony to the Commission, and it considers no new facts. The individual was not a Bain employee at the time of the SARS work, which ran from 2015 to 2017. He re-joined the firm in 2019 after having left in 2010. We submitted two detailed affidavits to the Zondo Commission, neither of which appear to have been factored into the report,” Bain said in a statement. 

The “individual” that Bain is referring to without naming him is Athol Williams, a former Bain partner turned whistle-blower. 

Williams has called for Bain to come clean about its full involvement at SARS and other state institutions. To start atoning for its behaviour, Williams recently told Business Maverick that Bain must explain how its senior executives, including Massone, had unfettered access to Zuma through regular and clandestine meetings about the restructuring of state organs beyond SARS. DM/BM