Hogan Lovells criticised by Labour peer over report into South African money laundering claims
Firm describes Lord Hain's accusations as 'unfounded'
January 15, 2018 at 07:13 AM
3 minute read
Labour peer Lord Peter Hain has written to the Solicitors Regulation Authority (SRA) to request an investigation into a report produced by Hogan Lovells concerning a South African government money laundering scandal.
The former Labour MP, who was made a life peer in 2015, has written to the SRA regarding a report produced by the law firm for the South African Revenue Services (SARS), the country's tax-collecting authority.
The report centred around financial transactions involving SARS deputy chief Jonas Makwakwa and employee Kelly Ann Elskie, which South Africa's Financial Intelligence Centre had identified as "suspicious or unusual".
Hogan Lovells South African chair Lavery Modise was instructed by SARS in 2016 to conduct an investigation into the accusations, which, according to The Telegraph, related to money transferred into the pair's bank accounts during a six-year period.
While the firm recommended that disciplinary action be taken against Makwakwa, Lord Hain has expressed concerns over Hogan Lovells' approach and the wider involvement of professional services firms in what he characterises as "sustaining the corrupt power elite in South Africa".
In a Lords' debate late last year, he stated: "It is not only financial institutions and governments which need to ensure that they are above reproach. A number of other global firms, whether legal, auditing, forensic or advisory in nature, have provided professional services to complicit individuals, companies and institutions.
"I am not suggesting that these firms are necessarily complicit in the corruption, because in most cases they have been employed by the complicit companies to try and surface the corruption."
Hogan Lovells has responded to the claims, describing them as "unfounded" and expressing disappointment that Lord Hain did not contact the firm before writing to the SRA.
A spokesperson said: "Lord Hain's unfounded accusations reflect a lack of understanding of the work we were asked to carry out 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. Anyone who wants to take the time to understand our limited role in this matter can very easily read about it on the parliament's website or our own.
"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.
"We have a fundamental duty to uphold the rule of law with integrity and professionalism, and have been strong advocates of that in South Africa. It is disappointing that Lord Hain did not contact us about our work for SARS in advance of his statement."
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