OLD AFRICAN BANK SOUNDS NEW AU­DIT ALARM

CityPress - - Business - JUSTIN BROWN justin.brown@city­press.co.za

The au­di­tor of the old African Bank, cur­rently un­der cu­ra­tor­ship, has raised the alarm about the com­pany’s lat­est fi­nan­cial re­sults on three key counts.

This comes as the bank re­ported it had turned an an­nual multi­bil­lion-rand loss into a multi­bil­lion-rand profit.

The old African Bank, now known as Resid­ual Debt Ser­vices (RDS), still has claims worth bil­lions of rands to set­tle. These in­clude money mar­ket funds held by clients who in­vested in African Bank debt in­stru­ments.

Its au­di­tor, Deloitte, has raised a qual­i­fied opin­ion re­gard­ing two key mat­ters with RDS. This means a mat­ter must be ma­te­ri­ally or fi­nan­cially worth con­sid­er­a­tion for an au­di­tor to qual­ify a re­port.

Firstly, Deloitte said it was un­able to de­ter­mine whether any ad­just­ments were nec­es­sary to the way in which as­sets were split be­tween the new African Bank – which was launched in April 2016, af­ter the old African Bank went bank­rupt in Au­gust 2014 – and RDS.

This means that the au­di­tor was un­cer­tain about whether the new African Bank and RDS had di­vided the “good” and “bad” books be­tween them cor­rectly.

RDS cu­ra­tor Tom Win­ter­boer said: “As cu­ra­tor, I sold as­sets and the [new] African Bank ac­cepted them. We did a cal­cu­la­tion of fair value and we had that fair value profit.

“All they [Deloitte] are say­ing is that maybe things could have been sold to good African Bank and the [credit] score­card did not work prop­erly ... Ar­riv­ing at that score [was im­por­tant].”

The score as­sessed the as­set qual­ity of the

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