Concern about reputational damage to accounting institution

A group of concerned members has requested the board of the South African Institute of Professional Accountants (Saipa) to call an urgent special general meeting to address their concerns.

The group of seven, allegedly speaking on behalf of 700 Saipa members, requested the meeting following the precautionary suspension of senior executives at the institute, including the chief executive, Shahied Daniels, and operations executive, Gavin Isaacs.

Read: Top executives suspended at accounting body

The Saipa board initiated a forensic investigation following governance concerns and serious allegations relating to irregular expenditure, costs associated with the development of an unapproved strategy and other unaccounted spending.

Nosheena Mansoor and Thomas Nyamvura were also suspended when it emerged that they were attempting to disrupt the investigation. 

Severity of the issues

“We want the board to take us into their confidence about the nature of the investigation and the severity of the issues,” Bennett Bailey, a member of the concerned group, said.

The allegations that will be investigated include: 

• 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 unauthorised interception and hacking of the chair’s emails.

The concerned members sent a letter on 14 December to the board, stating that they were invoking Section 12.2 of the Saipa constitution, requesting the board to call a special meeting within 30 days from the date of their correspondence to address critical matters.

The group attached the names and contact details of 700 Saipa members with their correspondence to the board.  

The relevant section states that the board “shall, on receipt of a written request, in which the objects of a proposed SGM meeting are stated and is signed by no less than 5% of members of all categories in good standing and eligible to vote, call a special general meeting”.

The group wanted to have the meeting before 15 January. Saipa chair Prem Govender said in response to questions from Moneyweb that a special general meeting would be held once “all governance processes and procedures” had been followed. This includes verifying the authenticity of the so-called concerned members calling for a special general meeting.

Read: Saica disciplinary process under fire

Bailey and fellow concerned members say in their correspondence they also want to discuss the appointment of the acting CEO, the negative media reports, and the fitness of the board. 

They expressed concerns about the “lack of intimate knowledge of Saipa operations” by the acting CEO, Tia van der Sandt, the institute’s risk and compliance committee chair. 

Reputational damage

Bailey feared that the forensic investigation could drag on for several months. The group was concerned about the impact of the suspensions on the reputation of the institute and the integrity of their professional designations. 

Govender said the organisation would have suffered more damage if it did not act on the information it had received. “The board would like to once again put on record that what was uncovered by both corporate governance and legal experts led to its decision to suspend the chief executive and chief operations executive,” Govender said. 

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She added that the board has appointed a “reputable firm” to conduct a forensic investigation into the matters brought to its attention. 

The forensic investigators have been given a very tight timeline to conclude their investigations and communicate the outcome and future course of action as soon as is reasonably possible, she said.

“The outcome of such an investigation will determine who is really damaging the reputation of Saipa,” Govender added.