Mkhwebane asked President Cyril Ramaphosa to take disciplinary action against Gordhan for violating the constitution by approving former Sars deputy commissioner Pillay’s early retirement and full pension benefits.
Her report was released on Friday.
Gordhan was the minister of finance when he took the decision in August 2010.
The public protector investigated the matter based on a complaint from an anonymous person. In her findings she said investigations showed Gordhan had irregularly approved the retirement and by law he should not have approved Pillay’s request for early retirement and full payout.
She also recommended that Sars recover the money paid.
In 2016, both Pillay and Gordhan were charged with fraud and corruption over the payout but the charges were later withdrawn due to a lack of evidence.
Former Sars commissioner Oupa Magashula, Gordhan and Pillay have all indicated that they would legally challenge Mkhwebane’s findings. Magashula was the Sars commissioner at the time.
On Wednesday, Malatji Kanyane, the law firm representing Gordhan, expressed their client’s objection to Mkhwebane’s decision in a letter.
It questioned why Mkhwebane had investigated a matter that dated back to 2010 when Section 6(9) of the Public Protector’s Act prevented her from probing a matter after more than two years had passed since it was raised, unless there were special circumstances.
Therefore, Mkhwebane was asked to specify what the special circumstances were that justified her action.
It was said in the letter that Gordhan had acted with “honesty and care” when he decided on the Pillay matter, and had consulted various experienced people on it, including Vlok Symington, a Sars pension expert, Magashula and National Treasury deputy director general Andrew Donaldson.