UK law firm mired in South African money laundering scandal
15 Jan 2018

City law firm Hogan Lovells is fighting off allegations of its complicity in a wide-ranging South African corruption scandal, after Lord Peter Hain accused it of producing a “whitewash” report for a government unit.

The law firm had stepped in to investigate issues pertaining to South African Revenue Service (SARS) deputy chief Jonas Makwakwa and his girlfriend Kelly-Ann Elskie, a SARS worker, after suspicious deposits were discovered in their bank accounts.

According to South African media, Elskie worked as the personal secretary of the SARS anti-corruption boss Clifford Collings.

However Makwakwa, who is married to another SARS worker, created and budgeted a key post for Elskie in SARS legal and policy division for which she was unqualified.

It later turned out that Makwakwa and Elskie had two children together and reporters revealed R1 million payment into her and Makwakwa’s accounts.

After the Hogan Lovells investigation, SARS said Makwakwa was found not guilty of charges leveled against him and he was reinstated into the organisation.

Lord Hain said he has, however, written to the UK Solicitors Regulation Authority (SRA) calling for it to launch an inquiry into the law firm.

Hogan Lovells responded with a statement on Sunday saying that Lord Hain’s “unfounded accusations” showed his “lack of understanding” of the work it was commissioned to conduct for SARS.

“We have fully reported the details of our engagement to the independent South African Parliament Standing Committee on Finance and we are very confident in its accuracy and probity,” it said.

“If Lord Hain does have evidence of corruption then that should be reported to the appropriate authorities in South Africa. We look forward to working closely with the SRA on any complaint that Lord Hain might have made to them.”

South Africa has been engulfed in a spate of corruption scandals in recent years, with a number of prominent cases pointing to government organisations and the alleged influence of the wealthy Gupta family, who are regarded as close friends of President Jacob Zuma.

Late last year, Lord Hain alleged British banks were part of the money laundering chain of the Gupta family and asked British watchdog the Financial Conduct Authority and Serious Frauf Office to investigate the matter.

Following Lord Hain’s remarks, HSBC admitted that it was forced to close bank accounts held by “front companies” associated with the Guptas.

The Guptas and President Zuma deny wrongdoing and the accusations levelled against them.

Related topics:

UK investigates HSBC over South African money laundering allegations

On a knife-edge – will KPMG survive in South Africa?

New corruption trouble for President Zuma – can he still duck and dive?

You can claim CPD minutes for this content, by signing up to our CPD Wallet

FREE CPD Wallet

You must be logged in to post a comment.

This site uses Akismet to reduce spam. Learn how your comment data is processed.