Picture: Gallo Images / Brenton Geach
Former board member of the Independent Regulatory Board for Auditors (Irba) Iqbal Motala has come out in defence of the audit watchdog’s chief executive, Jenitha John.
Motala resigned from Irba on 25 January – one day before Finance Minister Tito Mboweni decided to dissolve the board after holding discussions with its members regarding the “position the board [had] taken in respect of the chief executive officer and to discuss the resignation of a number of board members”.
Motala was not at the meeting. He has, however, rubbished claims that the controversial appointment of John was at the heart of the minister’s decision to fire the board.
In a statement, National Treasury said the dissolution of the board was in line with Section 12(5) of the Auditing Profession Act, which gives the finance minister the power to terminate the contracts of the members of the
regulatory board if their performance is deemed unsatisfactory.
Mboweni declined to expand.
A lawyer by profession, Motala was reappointed as a member of the Irba board in June last year, but resigned last month after he “realised that there was a concerted effort to get rid of Jenitha”.
The board had seen a series of resignations and allegations of infighting stemming from the appointment of John as CEO because of her history with sugar processing firm Tongaat Hulett.
John had served on that board since 2007 and was chair of its audit and compliance committee in 2018 when the company was involved in an accounting scandal.
It was found to have overstated its assets by R4.5 billion.
A PricewaterhouseCoopers (PwC) report implicated 10 Tongaat Hulett executives in the scandal but this did not deter the Irba board from appointing John as its chief executive.
Former board member Preston Speckmann told Moneyweb that he resigned after the newly appointed board held its second meeting in July last year.
His resignation letter to Mboweni gave the public a glimpse of the divisions within the board and set the ball rolling for more board resignations.
Zunaid Vally (who was appointed to replace Speckmann) and former board chair Martie Janse van Rensburg also resigned from the 10-member board.
Speckmann told Mboweni there were “distinct groupings” within the Irba board – the “old” group, which was “hell-bent” on having previous chief executive Bernard Agulhas return to his position, and the “new” group.
“The new group did not want interaction with Ms Jenitha John,” reads Speckmann’s letter.
“In their own words, she must leave given the Tongaat Hulett matter.”
Motala notes: “Preston Speckmann did not allude to the fact that he resigned because of the appointment of the CEO, instead he resigned because of the manner in which the board was dealing with the CEO. I fully endorse what Preston said.”
If the board had fired John over the Tongaat matter, it would have exposed itself “professionally” and “financially” because it received a legal opinion that John’s appointment was above board.
John declined to comment.
A new board is expected to be appointed in three months’ time, with businesspeople Nonkululeko Gobodo and Roy Andersen appointed by Mboweni as interim caretakers.
This article first appeared on Moneyweb and was republished with permission.
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