The investigation into governance concerns, among others, at the South African Institute of Professional Accountants (SAIPA) is at an advanced stage.
The SAIPA board appointed BDO to conduct the forensic investigation in December last year following the suspension of four executive officers, including the chief executive, Shahied Daniels, and the operations executive, Gavin Isaacs.
The board also suspended business innovation strategies executive Nosheena Mansoor and digital executive Thomas Nyamvura, who has subsequently resigned. The board has accepted his resignation. Daniels, Isaacs, and Mansoor are still on precautionary suspension.
Read: Accountancy body places executives on precautionary suspension pending a forensic investigation
Focus of the investigation
SAIPA chairperson Prem Govender says BDO has put together a strong team, and the organisation is expecting a report from them soon. She has been having regular feedback sessions with BDO.
“I, together with the board, am very comfortable with the way the investigation is being conducted. It is thorough, despite the volumes of documents and information they are interrogating.”
The investigation was initiated following governance concerns and allegations relating to irregular expenditure, costs associated with the development of an unapproved strategy, and other unaccounted spending.
The investigation focuses on:
- a variety of irregular expenditure relating to overseas travel without board approval;
- costs associated with the development of an unapproved strategy, which seeks to globalise SAIPA’s professional designations, without board or member approval;
- Setting up of an international SAIPA global entity to be based in Switzerland without board or member approvals; and
- training and other unaccounted expenditure related to the Centre of Future Excellence and the unauthorised interception and hacking of the chairperson’s emails.
In June last year, Daniels compiled a 30-page report, setting out the circumstances that led to the rift between the current board and management.
He stated in the report that the action, behaviour, aggressiveness, blatant falsities, and inaccuracies directed towards the management team were negatively impacting the dignity and morale of the staff.
Govender says because the matter is still under investigation and sub judice, she would prefer not to comment at this stage. “Once the investigation is complete, I will be happy to comment on the report,” she says.
Daniels was placed on precautionary suspension in November last year, together with the operations executive, followed a few days later with the suspension of the other two executives.
Tia van der Sandt has been acting as chief executive since the suspensions. Prior to her appointment, she served as the chairperson of the risk and compliance committee of the institute.
Member concerns
Shortly after the suspensions, a group of eight concerned SAIPA members called for an urgent special general meeting. They believed there were no legitimate reasons for the suspension of the four executives.
The eight members’ petition questioned 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”.
They also said it became evident that the board was not considering the interest of the institute in its dealings with the suspension of the executives.
Govender says once the board has received the report from BDO on the outcome of their investigation, and the board has had the opportunity to deliberate on it, it will share the details with SAIPA members. This will be done in a “suitable forum”.
The members who compiled the petition warned that SAIPA may lose its credibility. They also mentioned that members have indicated their intentions not to pay their dues and join other competing accountancy bodies. The members raised concerns about the potential loss of membership and revenue for the institute.
‘Business as usual’
When asked whether the investigation and apparent internal strife at the institute was affecting membership numbers, Govender said SAIPA has not lost any members.
“Members continue to ensure they are compliant by paying their subscriptions and are keeping up to date with their continuing professional development training.”
She adds that nothing has changed in terms of the institute’s credibility or its members’ credibility with their clients. It has been “business as usual” at the institute under the “able leadership” of the acting chief executive.
“All the members’ needs are being adequately met, and we have received no complaints to date,” she told Moonstone.
The institute remains a member of the International Federation of Accountants and the Pan African Federation of Accountants. “These relationships are still very strong and cordial, and we continue to work closely with both bodies,” says Govender.
Amanda Visser is a freelance journalist who specialises in tax and has written about trade law, competition law, and regulatory issues.
