Bain & Company - 25 October 2018 Letter to Judge Nugent - Response and Apology

Sep 13, 2026

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Formal correspondence from Bain & Company to Hon. Judge Nugent regarding a commission of inquiry into tax administration and governance by SARS. Bain addresses concerns raised in the judge’s letter, discusses developments related to statements and evidence by Mr Massone, and notes steps including investigation and termination of his employment relationship under applicable law. The letter also outlines governance improvements via a Public Sector Working Group and provides an apology for issues involving non-disclosure and coordination of cooperation.

LanguageEnglish

CategoryLetters

FormatPDF

Pages3

Reading Time1 min

AccessFree to download

Letter to Hon. Judge Nugent

Thank you and purpose of the response

Assessment of Mr Massone’s evidence and actions taken

Governance improvements and commission cooperation apology

BAIN & COMPANY e) Bain & Company, Inc. 131 Dartmouth Street Boston, MA 02116 USA Tel: +r 617 572 2000 Fax: +1 617 572 2 427 25 October 2018 Hon. Judge Nugent Commission of Inquiry into Tax Administration and Governance by SARS Hilton House, 2nd Floor 570 Fehrsen Street Brooklyn, 0181 Republic of South Africa Dear Judge Nugent Thank you for your letter dated 14 October 2018 ("your letter'') . You stated that your letter "is not an invitation to proffer explanations by letter that are not supported by evidence given in the ordinary course". The purpose of this letter is not to proffer any such unsupported explanations, but instead to inform you of certain developments, to request certain clarifications, and to make very brief submissions in relation to certain of the findings that you indicate the Commission might make on the evidence before it. You have informed us that the Commission might make certain findings, described in more detail in your letter, that follow on the evidence now before it and the inferences to be drawn from that evidence. These potential findings relate to prior evidence given by Mr Massone, as described in paragraphs 1 and 2 of your letter, and the actions and motivations ofthe"representatives of Bain"who were engaged in the SARS project, as described in paragraph 3 of your letter. The potential findings are, we recognize, very serious ones that will likely be perceived by readers of the Commission's final report as damning of Bain as an organization. With respect to paragraphs 1 and 2 of your letter, I wish to inform you that Bain has also been assessing the veracity of statements made by Mr Massone to Bain throughout the course of this inquiry, in light of the documents which were provided to the Commission by Bain. Bain, like the Commission, has grave reservations about what it has previously been told by Mr Massone, and generally about the veracity and reliability of some of Mr Massone's evidence before the Commission. As a result of Bain's own investigation and assessment, which is continuing, Mr Massone's employment relationship with Bain is in the process of being terminated, in accordance with the applicable law. In your letter, you have explained the bases on which you might draw negative inferences about Mr Massone's actions from evidence such as whether or not meetings took place, the number of meetings held and other such verifiable matters. As you are aware, Mr Massone has his own BAIN & COMPANY e) Page 3 are in the process of finalizing our payment to SARS. We sincerely believed that we had made a sufficient commitment to set aside the money, but your questioning made us realize this was not the case and prompted us to finalize the terms of repayment to SARS. Second, I wanted to inform the Commission that Bain has established a Public Sector Working Group comprised of senior Partners with experience in doing public sector work, particularly in developing markets. Among other things, this group will be reviewing our existing governance and risk management procedures relating to public sector work, and making recommendations for improvements based on lessons we have learnt from the work that was done for SARS, and the ensuing inquiry that you have led. The rigorous scrutiny of the Commission, and the enquiry process in general, have provided us with valuable insights that we intend to apply to our business practices going forward. Finally, I would like to offer the Commission an apology. Bain's cooperation with the Commission was managed and coordinated by Mr Massone in his capacity as office head and also as the senior partner who had led the SARS project. He had committed to full transparency with the Commission, which was in line with Bain's ethos and values, and he was trusted by the global leadership to lead Bain's cooperation. It became apparent to us a short time after his initial testimony that there were matters that had not

FAQs

What is the purpose of Bain’s letter to Judge Nugent?

Bain states the purpose is to inform the judge of certain developments, request clarifications, and make brief submissions regarding findings the commission might make based on evidence before it.

How does Bain respond to concerns about Mr Massone’s statements and evidence?

Bain explains it has been assessing the veracity of statements made by Mr Massone in light of documents provided to the commission, and that, as a result of Bain’s investigation, his employment relationship is being terminated under applicable law.

What actions does Bain mention to improve governance and risk management going forward?

Bain says it has established a Public Sector Working Group of senior partners to review existing governance and risk management procedures for public sector work and to recommend improvements based on lessons from the SARS project and the ensuing inquiry.

Sep 13, 2026

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