Saica set to crack whip on ‘rogue’ CAs

The SA Institute of Chartered Accountants (Saica) will institute disciplinary proceedings against nine of its members implicated in the SA Reserve Bank forensic report on alleged fraud at Limpopo’s VBS Mutual Bank.

But the body said it would have to wait for another disciplinary process to be completed by the Independent Regulatory Board for Auditors (Irba) before it calls to account Sipho Malaba, the KPMG auditing partner who bagged R34 million after fraudulently declaring unqualified audits at the bank according to the report.

The report found that Malaba knew that VBS was R1 billion in the red, but nevertheless signed off on its financials and pocketed about R28 million.

The report has recommended that the embattled audit firm, which was left reeling after its discredited investigation into the so-called SA Revenue Service’s “rogue unit”, be held liable for damages incurred by the VBS curator, National Treasury, and the Prudential Authority.

Senior counsel Terry Motau recommended that Malaba face criminal charges, saying he defrauded the SA Reserve Bank. The benefits extended to Malaba included an overdraft of R11 million and a bond of nearly R8 million, of which little was repaid.

The report further found Ihawu Lesizwe Trading, a company owned by Malaba’s wife Jacqueline, was granted a R2 million overdraft, which was gradually increased to R11 million.

“I have already reached the conclusion that Malaba was aware there was a cash hole when, on July 17, 2017, he gave his audit opinion in respect of the annual financial statements,” Motau wrote in the report.

Saica said that in the interest of transparency, it acknowledges that several chartered accountants (CAs) have been implicated in the report, and would like to confirm that all those who are found to have contravened the Saica code of professional conduct, will be held accountable.

Malaba gave “an unqualified audit opinion in circumstances where he knew the financial statements were misstated. He also gave a regulatory audit opinion which he knew to be false”, the forensic report reads.

Saica said the findings of advocate Motau’s report would be used as input to its disciplinary processes. “While Saica cannot comment in the media on any disciplinary matters that are still ongoing as it may jeopardise the administration of justice, we can confirm the process that members in the investigation process face.”

CAs mentioned in the report who were members of Saica are: Phalaphala Avhashoni Ramikosi, Bhekwayinkosi Gift Manyanga, Charl Cilliers, David Broom, Mariëtte Venter, Sechaba Serote, Andile Malusi Atwell Ramavhunga, and Tshifhiwa Matodzi. – Citizen reporter