Financial questions won’t go away

Cricket South Africa’s decision to change the inquiry into its finances from independent and transparent to internal and opaque may, to those of us unfamiliar with things like audits, point towards a cover-up. But that is not necessarily the case.

When CSA’s audit committee and its external auditors refused to sign off on the annual accounts without disclosure of the bonus payments, an internal inquiry should have been set up immediately. It was certainly a procedural error and needed to be addressed. But for some reason, it wasn’t.

The trouble with ‘hot news’ is that it cannot be contained so, while the CSA board prevaricated, it broke in the press. A knee-jerk reaction followed and a full, independent inquiry headed by former judge Pius Langa was promised before an internal inquiry had even been held.

FirstRand director Paul Harris was an independent director of CSA at the time of the bonus payments although he has subsequently been voted off the board amidst accusations that he was on a ‘witch hunt’ because of his refusal to sign the accounts. He strenuously denies such accusations and says his only ‘mission’ is to pursue truth and honesty.

“The duty of a director is to provide independent oversight of management on behalf of a  company’s stakeholders. One can therefore only apply one’s mind objectively once the facts have been put on the table during an internal inquiry, but that has not happened,” says Harris.

The reasons for the lack of action within CSA’s walls are the subject of much conjecture. What is clear, however, is that there were facts and information missing from the first draft of the annual accounts and a lack of disclosure by the chief executive, Gerald Majola.

One of the questions Harris would like answered is whether Majola knew that he stood to gain personally from South Africa staging the IPL and whether he disclosed that information to the board.

The other issue which needs to be addressed is whether the approximate R250,000 spent on travel and accommodation by Majola were legitimate business expenses. Whereas the bonus payments may have been ‘irregular’, there is a case for suggesting that there was nothing sinister about the way they were handled. Dodgy expense accounts, however, can lead to criminal charges and the board of directors can all be held responsible.

There are many questions to be asked and answered but life has been made a little more difficult by the recent removal of the chairmen of CSA’s Audit Committee, Finance Committee AND Remuneration Committee. Those are three big heads to roll within such a short space of time.

For now, however, recently elected CSA vice president AK Khan must be allowed to get on with his job as head of the internal inquiry. But should he ever, accidentally take a shortcut or forget to ask a pertinent or relevant question, he will find that there are many more people taking a very close and personal interest in his work than he even considered possible.

 

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