Former JSE chief Roy Andersen and Nonkululeko Gobodo step in as caretakers until new board is appointed. From Moneyweb.
Finance Minister Tito Mboweni has dissolved the entire board of the Independent Regulatory Board for Auditors (Irba), the finance ministry announced on Thursday.
The statement says Mboweni met with the Irba board of directors on January 26 to be briefed on the position the board had taken in the appointment last year of Jenitha John as CEO, a position she assumed in June 2020.
John’s appointment as CEO of Irba was heavily criticised at the time, as she had been head of the Audit and Compliance Committee at Tongaat Hulett when the group was involved in financial reporting irregularities. Tongaat had to write off capital and restate billions of rands worth of revenue in 2019 after previous management was found to be fudging the figures.
The finance ministry statement says that after meeting with the Irba board this week, Mboweni then engaged the directors over the dissolution of the board.
“After careful consideration and, amongst others, taking into account the resignation of a number of board members and challenges in the functioning of the board, the minister dissolved the BoD (board of directors), in line with section 12(5) of the Auditing Profession Act (APA). The BoD indicated that they respected the minister’s decision in this regard and they thanked the minister for the opportunity to serve on the board. The minister expressed his appreciation to the BoD and wished them the best in their new endeavours. This decision was taken in the best interest of the institution and the auditing profession.”
It was an open secret that the Irba board was in disarray after John’s appointment, with several board members resigning in recent months. Organisation Undoing Tax Abuse (Outa) raised concerns about John’s appointment last year, and the fact that a CEO charged with safeguarding the integrity of the audit profession may herself come under Irba scrutiny for her role at Tongaat.
“This put Irba in the peculiar situation where it may have to investigate its own CEO,” said Outa CEO Wayne Duvenage. “Our concern has always been that Irba chose to bring in someone as a CEO who had too many unanswered questions around her. We also had concerns that three former board members involved in the decision to appoint her were reappointed to the board last year.
”When the new board is appointed, we believe it should review the old board’s decision [to appoint the new CEO].”
Sources in the accounting profession say John, who stays on as CEO of Irba, has been making good progress in cleaning up the audit profession, but has been stymied by a fractious board. They point to Irba’s public displeasure at the soft penalties meted out by its own disciplinary committee to Twalizidanga Jordan and Danie Crowther over the 2013 audit of African Bank, which was placed under curatorship in 2014.
The African Bank auditors were found guilty of improper conduct on several counts, were fined the maximum allowable R200 000, but their names were not removed form the auditors’ register. Irba said its call for stiffer sanctions for errant auditors was answered when the Parliamentary Standing Committee on Finance approved the Auditing Profession Act Amendments (APAA) which would allow for harsher penalties in future such cases.
Nonkululeko Gobodo and Roy Andersen will be appointed to act as caretakers at Irba until a new board is appointed, which must happen within three months. Andersen was formerly president of the JSE, chairman of EY and CEO of Liberty. In 1987, Gobodo became the first black female chartered accountant in South Africa, led a merger of two medium-sized black accounting firms to form SizweNtsalubaGobodo, and has since gone on to found a consulting company.
The finance ministry says the caretakers will be required to assist with the smooth running of Irba until a new board is appointed, and to assist the Minister of Finance with the appointment of a new board.