‘Defrauded’ Bonuses to Cricket SA Officials Up at Board Meeting

Michelle Remo, “Big 4″ observer
June 14, 2011 /

A minister has sought to shed light on the heated controversy over bonuses at Cricket South Africa that have been allegedly awarded improperly to officials amid new allegations raised by the audit committee.

South Africa’s sports minister Fikile Mbalula called for a meeting with top Cricket South Africa officials, including its chief executive Gerald Majola, later this month to discuss claims of improperly awarded bonuses to top officials of Cricket SA.

Majola, for example, allegedly received a total of US$271,428. In addition, Kass Naidoo, brand and communications manager, and Nassei Appiah, chief financial officer, allegedly received US$28,571 and US$42,857, respectively.

In a statement, Cricket SA denied allegations of impropriety and said the bonuses were discussed during a meeting on April 15 when annual increases, salary adjustments and annual bonus payments were decided on.

According to audit committee chair John Blair, the bonuses “have not been approved by the board.”

Ghanaian international football midfielder Stephen Leroy Appiah said in a statement: “It was agreed that in the current market conditions a general salary increase of seven percent should be awarded. It was also stablished that certain members of staff were being paid below the salary rates applicable to their positions. It was also agreed that bonuses should be performance-driven. In these circumstances the bonuses were well-merited and were approved by the chairperson of Remco.”

Cricket SA explained the large amounts paid to officials, citing an “outstanding” year, though some board members insisted there must have been some limits to the bonuses.

For the financial year ended April 2011, Cricket SA reported a revenue increase of up to US$103.85 million from US$71 million, owing to the Champions League Twenty20, the Indian tour and the Makhaya Ntini T20 farewell match and concert hosted by the cricket governing body.

The meeting slated later this month is said to tackle “a framework for salary increases and bonuses,” Cricket SA said in a statement.

The issue rose from last year’s bonus controversy, when 40 staff members were paid $671,428 after hosting the IPL and the Champions Trophy in 2009. Later on, Deloitte auditors found impropriety in Cricket SA’s financial statements.

Consequently, Cricket SA President Mtutuzeli Nyoka called for an external investigation at the time, with a commission chaired by vice-president AK Khan.

The Khan commission recommended that “management of events be regulated by a comprehensive system of control accounting and that full and proper reports be furnished to the board during and at the conclusion of the event.”

Accounting firm has been appointed to conduct a forensic audit into the bonus scandal. But 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, said the report may take a bit longer amid conflicting views among board members on the choice of auditors to look into the controversy, including IPL2 bonuses, further putting off the process.

 

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