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30 Nov 2011 14:18
Submissions made by auditing firm KPMG at a hearing on Cricket South Africa were inconsistent with an executive summary it compiled earlier, a CSA official said on Wednesday.
This was the testimony of CSA cricket committee chairperson Andy O’Connor before the sport ministry’s inquiry into CSA’s financial affairs.
O’Connor said in Pretoria that he was shocked by KPMG’s conduct.
He was asked to read a paragraph from the KPMG report in which the auditing firm said CSA chief executive Gerald Majola had not wilfully deceived anybody.
“My understanding is that he [Majola] did not wilfully go out of his way to deceive anybody or hide anything from anybody,” O’Connor read from the final report.
However, KPMG’s risk and compliance specialist Herman de Beer told the committee last week there were “technical contraventions of the Companies Act”.
O’Connor said these revelations had shocked him as CSA paid KPMG a lot of money to conduct the forensic audit which finally bore contradictions.
Representatives of CSA are giving the only oral presentations to the committee, chaired by Judge Chris Nicholson, on the fifth day of the hearings.
Should’ve handled it better
On Monday, the South African Sports and Olympic Committee’s (Sascoc) chief executive Tubby Reddy said they should have dealt with the CSA bonus scandal better.
Reddy said Sascoc was invited to the CSA board meeting where the KPMG forensic audit report was presented in July.
The report indicated that Majola allegedly withheld information after receiving bonus payments for hosting the 2009 Indian Premier League (IPL) and Champions Trophy tournaments.
It found that Majola reportedly received further bonuses from CSA for the same work and that he had breached the Companies Act in four instances.
Reddy said Sascoc recommended seeking legal advice on the non-disclosure of the bonus payments.
What’s right and wrong
Advocate Azhra Bham, who looked into the breaches, made recommendations at a board meeting in August.
Reddy said that despite Bham and the then CSA president Mtutuzeli Nyoka’s legal counsel concluding that there was non-disclosure on the bonus issue, the board decided to merely reprimand Majola.
He revealed that Sascoc’s hands were tied as it had not initiated an inquiry and it had to make peace with the board’s unanimous decision.
“The Sascoc board have not expressed any opinion on the findings because we had to give a brief to the minister [Minister of Sport and Recreation Fikile Mbalula] as to what transpired,” Reddy said.
“We did not engage on what was right or wrong on what was transpiring because we had not conducted any investigation as such.”
He said Mbalula had engaged with the CSA board even before Sascoc was called in to be part of the process, which was in contravention of the Sports Act.
“Unfortunately it didn’t work according to the Sports Act, which says that Sascoc should be investigating in the first instance and if we can’t find resolution for whatever reason we then take it to the minister,” he said.
“But in this case, the minister got involved from day one with the CSA board, so we never had an opportunity to investigate this issue.”
In hindsight, he thought the process was not resolved appropriately and he hoped the committee would find what the appropriate action should be taken against whoever was guilty of wrongdoing.
The issue of an alleged R68-million in “missing” funds was a sticking point during Reddy’s submission.
Nyoka, who has since been ousted, claimed that these funds were misappropriated from the CSA account which arose from the IPL tournament.
Reddy said KPMG had told Sascoc that there was no evidence of the R68-million being missing, that “every cent had been accounted for” and that there was also no misappropriation.
The committee, however, contested that KPMG said it could not find misappropriation of funds which it thought was a different question to whether they could find any evidence of this.
“They were also asked at the end of that session that they needed to adjust their report to capture what they had answered in terms of those two questions,” Reddy said.—Sapa
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