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22/05/2020 06:30:45
OUTA asks Tito Mboweni to halt appointment of new CEO at IRBA
The Organisation Undoing Tax Abuse (OUTA) raised concerns about the pending appointment of Ms Jenitha John as CEO of the Independent Regulatory Board of Auditors (IRBA). OUTA wrote to the Minister of Finance, Tito Mboweni, requesting an investigating into her appointment and the apparent haste with which it is being carried out.
“Ms John has been on the Tongaat Hulett board since 2007, which covers the bulk of the period when the well-publicised financial reporting of irregularities at Tongaat took place. During this period, she was the chairperson of the Audit and Compliance Committee at Tongaat Hulett,” says Wayne Duvenage, OUTA’s CEO.
In the letter to Mboweni, OUTA points out that a PwC Report on the Tongaat Hulett financial reporting irregularities has indicated that Ms John will be investigated, as she (as chairperson of the audit committee) was responsible for oversight of the company’s financial reporting at the time of the findings.
The South African Institute of Chartered Accountants (SAICA) is the body responsible for investigating chartered accountants implicated in business failures, and there is a strong likelikhood that they will investigate John with regards to her role in the Tongaat Hulett matter.
We also believe there is a glaring question of a conflict of interest in John’s appointment at IRBA, as we believe IRBA should be investigating the auditors of Tongaat Hulett for the financial reporting irregularities, a matter in which she is directly implicated.
OUTA also expressed concern over the apparent rush to replace Mr Bernard Agulhas (the current CEO) with John by 25th May 2020, ahead of the envisaged appointment date in June 2020, and to do so without a handover. “Unless there is a substantive reason why Agulhas who, after 11 years at the helm is being hastily removed, we cannot understand why his experience is not being utilised during a reasonable handover period, as this will ensure the sharing of important institutional knowledge. Failing pressing reasons to remove the current CEO, suspicion about possible ulterior motives behind this appointment remains,” Duvenage adds.
Appointing a CEO implicated in irregularities will not only be highly inappropriate, but will also cause significant reputational damage to IRBA, a body that has a substantive role to play in addressing the growing concerns of financial reporting irregularities in South Africa over the past few years. IRBA needs impeccable, untarnished leadership and John’s hasty appointment will do it no favours.
The organisation urged Mboweni to halt John’s appointment and to institute an investigation into her background as well as the reasons that her track record apparently was not considered. If it was indeed taken into account, clarification is required on why these important matters were overlooked.