SAICA welcomes the NPA’s action in relation to the alleged fraud at VBS Mutual Bank

SAICA welcomes the NPA’s action in relation to the alleged fraud at VBS Mutual Bank

The South African Institute of Chartered Accountants (SAICA) has noted media reports regarding the arrest of certain individuals relating to alleged fraud that took place at VBS Mutual Bank and welcomes the action taken by the National Prosecuting Authority (NPA).

SAICA CEO, Freeman Nomvalo said, “SAICA reiterates that we expect all members of the chartered accountancy profession to uphold the highest ethical standards and to adhere to the SAICA Code of Professional Conduct.”

“All members who are alleged to have contravened this code will be investigated and, where appropriate, a disciplinary process will follow.”

Following Advocate Terry Motau SC’s report (“The Great Bank Heist”) in October 2018, SAICA initiated disciplinary investigations against implicated members – specifically Mr Tshifiwa Matodzi, the former Chairman of the Board of VBS Mutual Bank and Mr Andile Ramavhunga, the former CEO of VBS Mutual Bank.

On 20 February 2019, SAICA informed all stakeholders that Mr Matodzi’s hearing was concluded and that the Disciplinary Committee (DC) ordered the cancellation of Mr Matodzi's membership from SAICA in terms of the then SAICA By-law 30.2. As per the DC’s ruling, the outcome of the hearing was published in Accountancy SA magazine.

Mr Ramavhunga’s disciplinary hearing was part-heard in late 2018 and early 2019. This matter was last before the DC in February 2019 wherein his attorney advised that leave to appeal his sequestration matter was being sought. The DC, given the severity of the sanction which SAICA sought to impose, decided to grant Mr Ramavhunga the opportunity to seek leave to appeal. The next date of Mr Ramavhunga’s disciplinary hearing will be communicated once the appeal process is concluded and the SAICA hearing date has been confirmed.

The conduct of investigations – the role of IRBA and SAICA

It is important to note that SAICA cannot discipline firms, as the institute only deals with investigations into and disciplinary processes of individual members. In the Great Bank Heist Report, there are several SAICA members mentioned, including Mr Nhlanhla Kelvin Sipho Malaba and Mr David Broom who are also Registered Auditors (RA) with the Independent Regulatory Board for Auditors (IRBA). According to the then SAICA by-law 19.2, where a CA(SA) is also a RA and therefore a member of the IRBA, the IRBA must first undertake its investigation and disciplinary process.  

Further action

SAICA will monitor the legal proceedings in order to source further evidence related to all its members implicated in the alleged VBS Mutual Bank fraud.

It is also important to note the outcome of the SAICA investigation into the conduct of Ms Mariétte Venter, another SAICA member mentioned in the report.

The SAICA Professional Conduct Committee considered all the evidence presented for any alleged improper conduct by Ms Venter, who was the Acting CFO of Capricorn District Municipality at the time.

The Committee concluded that not only was there no evidence of any improper conduct by Ms Venter but that her actions were exemplary, in that, she stood up to immense pressure at great personal and professional expense and acted with the utmost integrity. Ms Venter’s intervention resulted in Capricorn District Municipality being one of the few municipalities in Limpopo that did not find itself in serious financial distress when VBS was placed under curatorship. The Committee commended Ms Venter for demonstrating the five fundamental pillars of the accountancy profession and noted the difficult circumstances under which she had been placed.

As a matter of course, SAICA does not comment publicly on the details of any ongoing investigations or disciplinary matters to avoid compromising the administration of justice. Disciplinary hearings are, bar exceptional circumstances, open to the public. For more information on the SAICA Code of Professional Conduct, disciplinary procedures and the new SAICA by-laws, please visit the SAICA website.