To my mind

Finweek English Edition - - News -

IN SOUTH AFRICA no­body can es­cape crime. It’s only our honourable Pres­i­dent who, on na­tional television, called this can­cer in our midst a mere per­cep­tion. Yet we couldn‘t be ac­cused of ex­ag­ger­at­ing were we to state that those who have not had first-hand ex­pe­ri­ence of crime are the lucky ex­cep­tions to a very dis­turb­ing rule. We at Fin­week were again made aware of that fact this past week by the news of the mur­der of Robin McGre­gor.

McGre­gor, who was mur­dered in his house in Tul­bagh, where he moved af­ter the death of his wife, founded McGre­gor In­for­ma­tion Ser­vices in 1986. In 1998 this data ser­vice be­came part of McGre­gor BFA, the fi­nan­cial data ser­vice that in turn last year be­came part of Fin24, the busi­ness unit that also houses Fin­week and our web­site,

McGre­gor (79) made a great con­tri­bu­tion to the SA busi­ness world by com­bat­ing com­pa­nies’ anti-com­pet­i­tive be­hav­iour.

It’s not sur­pris­ing that of the many books he ei­ther wrote or co-wrote one deals with dis­clo­sure and the pro­tec­tion of share­hold­ers.

In light of re­cent in­stances of an­ti­com­pet­i­tive be­hav­iour by some of SA’s lead­ing com­pa­nies – such as Tiger Brands – it’s heart­en­ing that peo­ple are speak­ing out in favour of the preser­va­tion of an ex­ist­ing pro­vi­sion in the Com­pa­nies Act that af­fords the pub­lic ac­cess to com­pa­nies’ share reg­is­ters.

A diminu­tion of this right in the new Bill would have se­ri­ous im­pli­ca­tions for trans­parency.

Two of SA’s lead­ing au­dit­ing firms pro­posed at pub­lic hear­ings that the new act should in­clude a lim­i­ta­tion of li­a­bil­ity clause. Al­though that would be in keep­ing with leg­is­la­tion that came into ef­fect ear­lier this year in the UK, it none­the­less gives food for thought.

The pro­posed pro­vi­sion would en­able an au­dit­ing firm to en­ter into an agree­ment with a client in or­der to re­strict the au­di­tor’s li­a­bil­ity for pro­fes­sional neg­li­gence. Should that be ac­cepted it would ne­ces­si­tate amend­ing a pro­vi­sion of the Act gov­ern­ing the au­dit­ing pro­fes­sion, which specif­i­cally for­bids any agree­ment that con­sti­tutes a re­stric­tion of li­a­bil­ity.

Al­though it could be ar­gued that it’s be­come nec­es­sary to re­strict au­di­tors’ li­a­bil­ity – partly since an in­creased ten­dency to­wards lit­i­ga­tion could have very costly re­sults for au­di­tors, which could in turn re­sult in au­di­tors’ fees be­com­ing un­af­ford­ably high – the ques­tion none­the­less arises whether that won’t boil down to an eva­sion of re­spon­si­bil­ity. As it is, au­di­tors aren’t ex­pected to de­tect fraud on the part of their clients.

A fur­ther re­duc­tion of li­a­bil­ity, though un­der­stand­able from the au­di­tors’ point of view, makes it seem as if com­pany share­hold­ers and in­vestors might find less sup­port from the work done by au­di­tors.

Trans­parency, which is aided by au­di­tors’ re­ports, is non-ne­go­tiable – not only at com­pany level but also in the pub­lic sec­tor. It’s there­fore heart­en­ing that al­le­ga­tions of cor­rup­tion re­gard­ing the award­ing of ten­ders by, for ex­am­ple, the Gaut­eng MEC for health, Brian Hlongwa, are be­ing in­ves­ti­gated. That type of con­duct should be vig­or­ously ex­posed.

We owe that much to some­one like Robin McGre­gor, who has trag­i­cally be­come part of this coun­try’s ghastly crime sta­tis­tics.

We would like to ex­press our deep­est sym­pa­thy to his five chil­dren and 11 grand­chil­dren. ¤

COLLEEN NAUDÉ colleenn@fin­

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