PAYING PEANUTS
If the state wants to put white-collar criminals behind bars, how will it get the forensic accounting skills to do this if it pays R31,000 a month?
UIt’s not as if there isn’t money in the state. It’s just that most of it seems to be going towards middle management and political heads
ntil Shamila Batohi, the national director of public prosecutions, stands up to announce the arrest of just one errant executive from Steinhoff, Tongaat Hulett or EOH, the perpetual cloud of suspicion over the corporate sector is unlikely to lift.
It’s not as if there isn’t a case to prosecute. Steinhoff, for example, laid a complaint with the police after forensic investigators from PwC concluded that R106bn in “fictitious and/or irregular transactions” were cooked up over the course of a decade. And it wasn’t a mystery who did this either: Steinhoff named former CEO Markus Jooste, and others, as culpable.
It’s the same with EOH, where CEO Stephen van Coller’s criminal complaints were, supposedly, being investigated by the Special Investigating Unit. And complaints were also lodged over how Tongaat’s books were cooked to the tune of R12bn.
So why haven’t there been any arrests?
One reason in mitigation is that these aren’t simple crimes. While overvaluing sugar cane may seem basic, and sending an SMS to your mates advising them to sell Steinhoff shares ahead of the big stock crash may seem like obvious insider trading, there are accounting judgments and nuances to it all. That’s why you need rare skills, and experience, in the prosecuting service.
So, given that imperative, consider an advertisement in December aimed at recruiting forensic skills for the Hawks, otherwise known (without irony) as the Directorate for Priority Crime Investigation.
For now, let’s leave aside the fact that the Hawks, in their wisdom, decided to place the adverts in Sunday newspapers on December 26, the day after Christmas, and just consider what they’re asking for.
For a “senior forensic analyst” and “senior investigative accounting analyst”, the Hawks require someone to have a degree or diploma, two years’ experience and, ideally, a qualification in “internal auditing/ accounting/forensic accounting or a related field”.
You’ll be expected, among other things, to “conduct financial statement analysis”, testify in court as an expert and assess compliance with accounting rules.
Those are jobs with considerable stress, given that you’ll be going up against well-heeled executives eager to keep those heels in showroom condition — and who will have hired the most ravenous legal teams that money can buy to ensure that.
So what do you expect the Hawks are keen to pay for this sort of rare forensic skill?
Well, those high-pressure roles carry a salary of R376,473 a year — about R31,000 a month. As you can imagine, the forensics arms of the professional services firms like KPMG, Werksmans or FTI Consulting are paying multiples of that. (Interestingly, this is also the salary offered by the Hawks for the position of investigator for tender fraud, where in addition you’ll have the joy of bumping heads with venal politicians, and for investigators of “commercial technology crime” and “serious banking crimes”.)
Dave Loxton, a partner at Schindlers Forensics AI, says when you’re offering salaries like that, you’ll never make headway in tackling white-collar crime. In the private sector, he says, forensics experts are being hired for upwards of R1.8m a year.
“For R30,000 a month, you probably won’t attract anyone with any experience. You may get one or two people, perhaps, who’ve retired and want to help. As it is, first-year associates at law firms are getting paid more than that,” he says.
Loxton should know: he spent three years working as a state prosecutor before being lured to the private sector. “I loved my time as a prosecutor and I would probably still be there, were working conditions and salaries better. One prosecutor I work with, for example, told me last week not to e-mail him because their system was down. You can’t work like that,” he says.
Petrus Marais, senior MD of FTI Consulting in SA, agrees with the sentiment.
“For a senior manager, R1.4m and upwards is what you’ll have to pay. And it will be more if you have a financial qualification, which is what you need to unpack the white-collar cases,” he says.
It’s not as if there isn’t money in the state. It’s just that most of it seems to be going towards middle management and political heads, rather than those doing an actual job keeping the country running.
Consider that the CEO of the Road Traffic Management Corp, which manages the abomination that is eNatis, earned R9.3m last year. Or that transport minister Fikile Mbalula earned R2.4m over the same period, and this dissonance becomes clear.