Breaking News: London law firm accused over role in South Africa scandal

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Lord Hain says report by Hogan Lovell into ‘money laundering’ at tax agency was a whitewash

South Africa’s president Jacob Zuma.

City law firm Hogan Lovells has been accused of helping enable the Gupta brothers’ “state capture”, and corruption in South Africa.

Peter Hain, a former Labour cabinet minister and veteran anti-apartheid campaigner, told the House of Lords on Monday that he had reported Hogan Lovells to the UK’s Solicitors Regulation Authority (SRA) over concerns that the firm produced a “fatally flawed whitewash” report into claims of money laundering at the South African tax agency.

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Lord Hain said the flawed report made the firm “complicit in undermining South Africa’s once revered tax-collection agency, and thereby effectively underpinning President Jacob Zuma and his business associates, the Gupta brothers and others, in perverting South Africa’s democracy, damaging its economy and robbing its taxpayers”.

A spokeswoman for Hogan Lovells dismissed Hain’s allegations as “unfounded accusations”.

Hain’s speech has dragged Hogan Lovells, a global law firm with more than 2,500 lawyers, into the growing South African political scandal, which has already tainted several British companies.

Opposition South African politicians and campaigners accuse the billionaire Gupta brothers of exploiting their close friendship with Zuma to take control of some government affairs and win big state contracts for their family businesses. The Gupta family and Zuma deny the allegations, which were first leaked to the media last summer.

Several British companies have been caught up in the scandal, including public relations firm Bell Pottinger which collapsed into bankruptcy last year following revelations that it sought to stir up racial tension in the country on behalf of the Guptas.

Hain said in his speech to the Lords: “It should be a matter of shame that companies headquartered here in the UK have aided and abetted money laundering, corruption and state capture in South Africa – including Bell Pottinger, KPMG, McKinsey, SAP, and banks such as HSBC, Standard Chartered and Baroda – in total betrayal of Nelson Mandela’s legacy.

“I have just referred to the Solicitors Regulation Authority Hogan Lovells, the international law firm headquartered here in London, for enabling a corrupt money launderer to be returned to his post as second-in command of the critically important South African Revenue Service (SARS).”

Hain’s claims against Hogan Lovells relate to t