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Questions have been raised about the ability of accounting bodies to hold professionals such as former Eskom chief financial officer Anoj Singh to account.
This follows several months of revelations against chartered accountants at KPMG and Steinhoff, which has put the prestigious industry under the spotlight.
According to the South African Institute of Chartered Accountants (Saica) members’ register, Singh has been a member since January 2000.
His appearance on Tuesday before the parliamentary portfolio committee investigating state capture earned the ire of MPs who said he’d failed to help them in providing information “on acts of corruption” as he’d been part of a team that had brought the power utility “to its knees”.
He faces an investigation by Saica for “improper conduct”, after the lobby group the Organisation Undoing Tax Abuse (OUTA) laid a complaint against him in September 2017.
OUTA chairperson Wayne Duvenage confirmed to Fin24 on Wednesday that they’d received a response at the end of October from the accounting body which said it had prima facie evidence of improper conduct by Singh at Eskom and would put a single charge sheet to him, which he’d be required to explain.
Duvenage said that since then, there hadn’t been much action from Saica, despite being asked repeatedly for follow-ups.
OUTA also laid a criminal charge against Singh who told MPs that the Eskom board of directors was responsible for approving the R1.6bn prepayment and guarantee to Gupta-owned Tegeta coal, as well as signing off on the R1.6bn payment to McKinsey and Gupta-linked Trillian Capital.
Khaya Sithole, an accountant and analyst says its unlikely Saica will be taking any strong action against Singh.
“The big problem with Saica is that it’s more of a members club, it isn’t a statutory body, and it’s voluntary.”
“All CAs [in SA] train through Saica and become Saica members. The training platform is made up of 2 tracks. Track 1 refers to those who train at traditional auditing firms (KPMG, PwC Deloitte etc.).
"Track 2 are those who train in any other training office environment (the banks, private companies etc.). Once the training is done, all tracks can apply for Saica membership. However, only those in track 1 can then be members of the Independent Regulatory Board for Auditors (IRBA) after additional requirements are met, Sithole explained."
In an emailed response to Fin24, Saica said it’s unable to confirm whether Singh is being investigated, in order to allow for due process.
The Institute said that depending on the nature of the breach, a member could be fined up to half a million rand, reprimanded or have their membership suspended or disqualified.
Saica doesn't need more evidence
Vocal critic against state capture and chief executive of Pan-African Investment and Research, Dr Iraj Abedian, claimed Saica is wasting time in not sanctioning Singh.
“You don’t really need any more evidence, even the NPA (National Prosecuting Authority) has taken steps against the Guptas… McKinsey is prepared to pay back the money [to Eskom] and Anoj Singh’s signature is on that contract. It’s really pathetic”, he said.
Abedian added that he’s concerned Saica’s CEO Terrence Nombembe who earned praise for his anti-corruption stance as the former auditor general, has been muzzled.
Sithole said the damning allegations against and investigations into accountants in South Africa should be seen by the industry as a moment to reflect.
“Whether it can reconstitute the way it engages itself, so when one person does something ([irregular], it doesn’t affect the entire profession,” he told Fin24.
Meanwhile, earlier in January, IRBA said that one if its lines of investigation into KMPG is nearing completion and will be tabled at the upcoming investigating committee.
Saica is undertaking a separate investigation into the individual auditors at KMPG, who worked on the Gupta account
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