‘Cabal’: Former IRBA chief executive Bernard Agulhas has been accused of trying to oust his replacement, Jenitha John
South Africa’s audit watchdog, the Independent Regulatory Board of Auditors (IRBA), has for the past few months been rocked by a scandal relating to the appointment of its new chief executive.
The latest is an anonymous dossier by a whistleblower, which details how the former IRBA chief executive, Bernard Agulhas, is allegedly at the heart of a “cabal” that seeks to oust the company’s newly appointed chief executive, Jenitha John.
Agulhas’s alleged “underhandedness” in trying to remove John can be seen in instances where he allegedly instructed staff members not to talk to her during her induction. He also allegedly told them to share confidential company information with him even after his departure in June, according to the whistleblower.
Agulhas has denied the allegations, saying that his interest in his successor is based on his desire to ensure that the values of the IRBA are maintained. He says the allegations against him are intended to divert attention from the “criticism” against John’s appointment.
Jenitha John.
“The fact that the public has questioned the appointment should not be diminished by making the issue personal and detracting from the public’s concerns,” he says.
John would not comment on whether she is aware of any “cabal” that seeks to reverse her appointment. But she said the transitional months of May and June were “challenging.”
The whistleblower says Agulhas first sought to “undermine” the board’s decision to appoint John after he was one of four shortlisted candidates who were not chosen for the chief executive’s position.
Agulhas has used John’s previous role as the chairperson of the audit committee of Tongaat Hulett to “cast aspersions on her credibility, even though two professional bodies were comfortable with how [she] performed her duties”, according to the dossier.
Her appointment in June this year elicited widespread opposition. She had been on the Tongaat Hulett board since 2007 and was chairperson of Tongaat’s audit and compliance committee when, in 2018, the JSE-listed sugar producer said the company’s financials could not be trusted, because it had misrepresented its financial statements, resulting in inflated profits. PwC investigations implicated 10 executives.
Civil society organisation Outa said in a statement soon after John’s appointment that appointing her would result in “significant reputational damage to [the] IRBA”.
Her appointment took place when the audit profession had been rocked by various scandals, including those at Steinhoff and VBS Mutual Bank.
The uproar over John led to Finance Minister Tito Mboweni to say he would ask the Irba board to review John’s appointment to verify any impropriety.
Does it bother John that the Tongaat cloud still hangs over her professional head? “Not at all,” she said.
“The negative perceptions on the Tongaat Hulett matter created by the media and certain aggrieved parties have fuelled a narrative that is unfounded and baseless.”
Agulhas said: “To be the regulator, you have to be independent, and you can’t be conflicted at all. The conflict [against John appointment] is because there has been some involvement with clients that [the] IRBA is investigating.”
These allegations also appear in WhatsApp messages between Agulhas and other IRBA staff members where John’s appointment is discussed.
In a WhatsApp conversation on 23 June this year Lorraine wrote to Agulhas: “I can’t believe we have not succeeded in overturning the board’s bad choice … Tito must get a move on!”
Agulhas has confirmed that he is in an IRBA executive department WhatsApp group with his personal assistant, Lorraine, and two other people, Lebo and Evasen. He said the group was not used to discuss how to remove John, but to discuss matters related to the watchdog such as potential risks and responses.
When asked earlier in the week why he still presented himself as the chief executive of the IRBA on his Linkedin profile, despite leaving the institution in June, Agulhas said he had forgotten his password. In a later email, Agulhas said he had not been active on the social network and has not updated his profile “in years”. By the time of publication, Agulhas had updated his profile to reflect the changes.
The whistleblower’s dossier comes on the back of the July resignation of former board member Preston Speckman. In his resignation letter addressed to Mboweni, Speckman accuses some board members of attempting to “destroy careers”.
In a follow-up letter to the finance minister in August, Speckman says: “It became clear to me that there was a grouping of directors that was hellbent on recalling the previous CEO [Agulhas] and having him serve for another term of office. The way they went about it effectively rendered the board dysfunctional.”
Speckman said the board was divided between a “new group” and “old group” of directors, the latter being “hellbent” on removing John as chief executive because of the Tongaat issue. He said Agulhas is part of the “old group”.
Through his interactions with the former chief executive, Speckman said he learnt that there was a plan to remove John and that he (Agulhas) would replace her until he reached the age of 60.
Agulhas denied the allegation, saying: “I have moved on and [I am] currently working on a project of national interest.”