Saica disciplinary process under fire

The legal team of Graeme Rigby a chartered accountant (CA) who for two years stood accused of gross negligence, dishonesty, and bringing the profession into disrepute, only to see the South African Institute for Chartered Accountants (Saica) disciplinary process collapse completely during the recent hearing, has ripped apart institute’s disciplinary process.

Adv. Duncan Turner said that it is flawed, unfair towards Saica members and must be drastically changed. He asked the independent disciplinary panel to make specific recommendations.

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During the hearing Saica dropped all charges relating to Rigby’s integrity and only persisted with a watered-down version of one of the three original charges.

Rigby testified that during the more than two years he had the “the sword of Damocles” hanging over his head, as the panel chair Azhar Bham SC called it, he was unable to grow his small tax and accounting practice. He had to contend with the obligation to disclose during any due diligence by a prospective client that he was being investigated for dishonesty. His health was also severely impacted by the stress related to the disciplinary process and received no support from Saica.

Saica was seriously questioned for not doing any independent investigation into the complaint laid by Simon Mantell, sole proprietor for the biscuit producer Mantelli’s, about events related to the submission of a tender for salty snack to be serve on SAA flights in 2013 that SAA subsidiary Air Chefs first awarded to Mantelli’s, only to unlawfully withdraw it shortly thereafter.

Rigby at the time was financial director of Ciro, a subsidiary of the listed AVI group that eventually got the orders.

Mantell has since made it his business to hold officials in the public and private sectors who had a hand in the untoward conduct to account. He recently opposed an application by Air Chefs to review and set aside a report by the Public Protector that made adverse findings against the company including remedial action that would see Air Chefs compensating Mantelli’s. The court has not yet ruled on the matter.

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In Rigby’s case, Saica on request of Rigby, provided him with the Code of Professional Conduct the charges were based on. The version Saica provided, however only came into effect after the alleged conduct occurred. The disciplinary panel did not allow the Saica legal team to hand over the correct version during the hearing.

Mantell is accusing Saica of making a complete mess of the process and misleading the panel about the reason they failed to call him to testify.

Saica changed its legal team halfway through the disciplinary process, which disrupted it. According to Mantell, that followed only after he brought a serious conflict of interest to Saica’s attention.

Denial 

The institute however denies misleading the panel, saying they were unable to timeously secure an affidavit from Mantell and therefore had to proceed without his testimony and only changed legal teams “out of an abundance of caution”.

Bham asked during the hearing whether the case should ever have proceeded to a hearing. He also asked the Saica legal team if, should Rigby be found guilty of the one flimsy charge left, be punished at all. “Is that which he went through so far, not enough?”

Saica alleged that Rigby when the tender was compiled:

• In his capacity as a CA certified a document containing Ciro’s banking details while he was also a signatory in his capacity as financial director. This it says constitutes a conflict of interest.
• On 26 April 2013 signed a declaration that the Ciro bid was complete and compliant, while the bid was only compiled over the next two days.
• Made conflicting statements to Mantell and Air Chefs and thereby misled Air Chefs.

Saica engaged neither Air Chefs nor Ciro, whose employment of Rigby ended shortly after the events, to get their input about what happened and to get the relevant documents. They simply accepted what they received from Mantell and forwarded his correspondence to Rigby every time for his response.

“I was diagnosed with obsessive compulsive syndrome 15 years ago and was on medication for it. What happens is that I keep on thinking about the same thing, and it gets bigger and bigger in my head. Every time when I thought I was getting back to equilibrium, another e-mail would arrive from Mantell and the cycle would repeat itself,” Rigby testified.

During the hearing he said the bid document was complete when he signed the declaration and the work done in the following two days were only supplementary. Saica was unable to prove otherwise and dropped the charge.

They were also unable to produce any evidence to support the charge of misleading Air Chefs and dropped that charge as well.

The only charge Saica persisted with was that relating to his certification of the document. Saica argued that the document itself provides the necessary proof and asked that he be found guilty and fined R100 000, R50 000 of which should be suspended.

Bham however asked if Saica was, without access to the full bid document, even sure of the purpose of the certification and if Air Chefs, to whom the document was addressed, was at all consulted on the matter.

Turner asked that the panel make the following recommendations regarding the Saica disciplinary process:

• Members against whom complaints have been filed must be supported by case managers regarding the process and related mental health issues.
• Serious matters like these must be finalised speedily.
• The complainant must not be allowed to play an active role in the process and questions to the accused must be put by Saica, not directly by the complainant.
• Saica’s charge sheet must be detailed, and all the relevant documents must be included.

The panel indicated that it would try to finalise its findings before Christmas.