Conflict Between Choice of Auditors Delays Probe into Cricket SA Corruption

Michelle Remo, “Big 4″ observer
May 25, 2011 /

Inconsistent views among board members on the choice of auditors to be appointed to look into allegations of financial irregularities, including IPL2 bonuses, within Cricket South Africa have further delayed the process.

Although Cricket SA has already appointed KPMG to conduct a forensic audit into the bonus scandal in the next four weeks,Ishmael Semenya, a member of Cricket SA’s legal and governance committee who earlier vowed that a final decision could be reached by May 7, now said the report may take a bit longer.

Semenya has been tasked to secure the services of an appropriate firm to conduct the investigation.

The independent audit will cover the “bonuses, travel expenses, related expenses and fringe benefits paid to CSA employees in connection with the 2009 Indian Premier League and Champions Trophy” according to Semenya.

The delay comes as Cricket SA board members could not reconcile their choice of auditors to carry out the investigation initially ordered by CSA President Mtutuzeli Nyoka.

Semenya said the board members have objections over the appointments of certain companies to assume the task. The differences, however, were watered down by Nyoka, describing them as “minor” issues.

On the choice between a number of accounting firms to conduct the independent audit, Cricket SA seems to choose KPMG for the task.

Separately, the South African Revenue Service will conduct its own forensic audit into Cricket SA finances.

Nyoka was relieved of office on February 12 in a vote of no confidence after calling for the independent audit into IPL bonuses and accusing Cricket SA chief executive Gerald Majola of hiding the bonuses he had received together with other Cricket SA management and staff.

On April 15, Nyoka forwarded his case to the South Gauteng High Court that reinstated him on grounds that he was not duly notified about the meeting where he was removed in absentia. The court further ordered Cricket SA to disclose its accounts for the R86.4 million paid into a special account by the IPL tournament organizers.

Nyoka claimed that the Cricket SA failed to properly process the IPL bonuses.

An internal investigation that rose from Nyoka’s call for independent inquiry found that Majola was not involved in a wrongdoing that included a R4,7 million in bonuses paid to 40 staff members of Cricket SA.

Majola had almost R1,8 million shares, while Don McIntosh’s, CSA’s chief operating officer at that time, were more than R1,4 million, amounts on top of the bonuses that came from the organizers of the 2009 Indian Premier League and the Champions Trophy.

Nyoka raised doubts over the way the funds were transferred as they were not fully declared to Cricket SA’s governance committees.

Other than the bonuses, Nyoka questioned the travel expenses worth R629000 incurred by Majola and his wife and children.

An investigation that commenced on September 29, 2010 led by CSA vice-president AK Khan found that Majola was guilty of an “error of judgment” in his handling of the bonuses.

The Khan commission ordered Majola to repay R28169 of funds spent on travel and accommodation costs for his family.

 

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