Four executives of the South African Institute of Professional Accountants (SAIPA) who have been placed on precautionary suspension, pending the outcome of a forensic investigation, have denied the allegations against them.
The association notified its members on 27 November that chief executive Shahied Daniels and chief operations executive Dr Gavin Issacs had been placed on precautionary suspension, and that Tia van der Sandt had been appointed as acting chief executive. Then, on 30 November, members were informed of the suspension of business innovation strategies executive Nosheena Mansoor and digital and technology officer Thomas Nyamvura.
SAIPA made the suspensions public in a media statement released on Tuesday.
The statement quoted Prem Govender, the chairperson of SAIPA’s board, as saying the board will commission a forensic investigation firm to investigate alleged irregular expenditure relating to:
- overseas travel by the chief executive without board approval;
- the costs associated with the development of an unapproved strategy that seeks to globalise SAIPA’s professional designations without board or member approval;
- the setting up of an international SAIPA global entity to be based in Switzerland without board or member approval;
- training and other unaccounted expenditure related to the Centre of Future Excellence; and
- the unauthorised interception and hacking of the chairperson’s emails.
“A precautionary suspension does not suggest or presume wrong-doing or guilt. A precautionary suspension upholds the highest standards of governance and integrity to protect the integrity of a forensic investigation,” Govender said.
The decision to suspend the executives has not gone unchallenged. On 1 December, eight SAIPA members sent an email to the board and some of the Institute’s members calling for an urgent special general meeting (SGM) to be convened by 12 December.
In terms of SAIPA’s constitution, the board must call a SGM if it receives a written request for one signed by at least five percent of the members. According to the email sent by the eight members, about 11 000 members are eligible to vote, so their petition requires the support of more than 600 members.
Reasons for the suspensions questioned
In the email, the eight say they “believe that there are no legitimate reasons for the suspension of the four executives, but, most importantly, it has become evident that the board is not considering the interest of the Institute in its dealings with the suspension of these executives”.
They said the abrupt suspension of the four senior executives has “plunged the organisation into a crisis” and has place the future and sustainability of SAIPA as risk. Members have indicated their intentions not to pay their dues and join other competing accountancy bodies, which will result in a loss of membership and revenue for the Institute. Stakeholder relationship built over many years and goodwill are at risk. They added that the board and acting chief executive appear to be “hell-bent on driving the Institute into the abyss”.
SAIPA members to whom Moonstone spoke are concerned the crisis within the organisation could result in it losing its status as a Registered Controlling Body with the South African Revenue Service, thereby placing their livelihoods in jeopardy.
The eight members’ petition also questions Van der Sandt’s suitability as acting chief executive, saying that because she is not a SAIPA executive or employee, “her lack of intimate understanding of the operations of SAIPA will lead the organisation into deeper crisis”.
The members’ petition itself has become a subject of contention. They have threatened to take legal action if the board, the company secretary, or the acting chief executive do not transmit their communication of 1 December to all members on SAIPA’s mailing list.
Govender said board could not turn a blind eye to all the allegations levelled against its chief executive and chief operations executive.
She denied that SAIPA has been plunged into a crisis; instead, it was ensuring that it adhered to its code of conduct and fiduciary duties while servicing its members.
Although Van der Sandt may not be a SAIPA employee, she was not new to the organisation and serves as chair of its Risk and Compliance Committee.
The precautionary suspensions were not abrupt but followed “extensive deliberation, obtaining legal opinions, and considering a report by corporate governance experts”, Govender said.
Once investigation has been concluded, the board “will thoroughly review the findings and provide a comprehensive update to our members, staff, and stakeholders”.
But the SAIPA members to whom Moonstone spoke questioned why the board needed to commission a forensic investigation by an external entity into matters that had come within the purview of the board’s sub-committees and the board during its quarterly meetings.
