OUTA asks new auditors' oversight board to review CEO appointment

It is inappropriate for the auditors' regulatory body to have a CEO implicated in serious financial reporting irregularities.

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02/07/2020 14:45:43

                                                                                                                                                                                                                      OUTA asks new auditors' oversight board to review CEO appointment   

                                                                                                                                                                                                                      OUTA has written to the new board of the Independent Regulatory Board for Auditors (IRBA) to ask that they review the recent appointment of Jenitha John as the CEO of IRBA and provide the documents on which the previous board based this decision.

                                                                                                                                                                                                                      Three members of the previous board who were party to the decision to her appointment have been reappointed to the new IRBA board. "OUTA has asked that these members recuse themselves from the decision when considering Ms John’s future at IRBA,” says Wayne Duvenage, OUTA’s CEO.

                                                                                                                                                                                                                      The appointment of a CEO at IRBA who has been implicated in serious financial reporting irregularities is not only highly inappropriate but will also cause significant reputational damage to IRBA. This is a body that has a substantive role to play in addressing the growing concerns of financial reporting irregularities in South Africa. John was 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.

                                                                                                                                                                                                                      Furthermore, in a SENS announcement on Tongaat Hulett on 1 July 2020, it would appear that John could very well be under investigation by the JSE, following her tenure at Tongaat Hulett, as is reflected in paragraph 10 of their 1 July statement: “The JSE is therefore duty bound to properly investigate all potential breaches of the Listings Requirements by companies and their directors and to take the necessary and appropriate action if the Company and/or its directors failed to comply with the provisions of the Listings Requirements. This concludes the JSE’s process in respect of the Company as a juristic person. The investigation into the conduct of individuals that presided at the Company during the periods in question and who are bound by the Listings Requirements is ongoing."

                                                                                                                                                                                                                      OUTA has also sent IRBA a request in terms of the Promotion of Access to Information Act (PAIA), asking for copies of the previous IRBA board's notes and minutes on the decision to appoint John as CEO. We await their decision to provide us with these minutes, failing which we will make a decision on the need to do so via legal channels. We trust the new board will reach a decision on the way forward within the near future. 
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