SAICA agrees to investigate VBS Bank CEO following DA complaint

The DA welcomes the decision of South African Institute of Chartered Accountants (SAICA) to investigate VBS Mutual Bank CEO, Mr Andile Ramavhunga, for failing in his fiduciary, ethical and professional duties.

This follows the DA’s complaint that Ramavhunga’s unethical conduct had brought the charted accountant profession into disrepute.

Therefore it is absolutely vital not only for this profession but also for general trust in the financial system of South Africa that there are no delays in the SAICA investigation into the alleged malfeasance of Mr Ramavhunga in his role as CEO of VBS Mutual Bank.

The VBS looting that took place on Mr Ramavhunga’s watch should not go unchallenged. His reasoning that he was not aware of the bank’s dodgy financial affairs is in itself an indictment and an admission of his delinquency.

Whether or not Ramavhunga, the VBS Bank CEO, was aware of the seeming grand theft taking place at VBS Bank does not make any difference for poor South Africans who have now been left in the lurch while individuals who apparently corruptly benefited from the proceeds of criminal activities and their families continue to live in the lap of luxury.

The DA believes that a thorough investigation will serve to both clear Mr Ramavhunga’s name if found innocent and to reassure all South Africans that SAICA takes strong action against any of its members who fail to act in the utmost ethical and professional way.

The DA will monitor the progress that SAICA makes to ensure that this investigation is:

  • thorough and is not structured in a way that is intended to let Mr Ramavhunga off the hook;
  • swift and is not a long dragged out affair that simply reinforces the damage to the confidence levels in the economy; and
  • fair and does not result in a simple “slap on the wrist” where a severe punishment may well be appropriate.

The DA trusts that SAICA will prioritise this investigation and make every effort to restore the public’s faith in the scandal-ridden financial services sector.

The DA will not tire in its duty and commitment to the South African public to hold unethical individuals accountable.

 

KPMG failures pose risks to the state

Today’s SCOPA briefing by KPMG on the SARS Rogue report revealed a lack of transparency and audit integrity by KPMG with regards to reportable irregularity to the Independent Regulatory Board for Auditors (IRBA) , over a three year period, within the 33 state entities that it was providing audit services for.
The briefing provided clear evidence of poor oversight that exists over audit firms in South Africa. We are concerned that this poor oversight may have negatively affected the proper functioning of government departments and state entities.
Due to the compromised SARS rogue unit report prepared by KPMG, the DA will call for an independent inquiry that:
· will be transparent and composed of a member of Parliament, as per the DA’s initial suggestion to the SCOPA chairman, Temba Godi;
· will review the documents of the briefing that SARS gave to KPMG, which KPMG has agreed to provide; and
· will review all documentation and reports of the Gupta related companies doing business with the State. SCOPA has requested these from KPMG.
It is unacceptable for auditors to claim to assist state departments and entities but fail to report irregularities, as required by law, to IRBA and SAICA for further investigation.
KPMG has entered into 1 301 projects with the state and constitutional institutions last year and 3 948 over the last three years. It is clear that the presence of systemic problems at KPMG could pose a great risk for the state.
The DA, therefore, calls for a review of all the contracts that government departments have entered into with KPMG including all the contracts that the firm has tendered for.
The DA will not tolerate corruption and poor oversight, whether in the private or public sector as this has consequences financial accountability.