Improper conduct: Auditor faces VBS repercussions
The fine given to disgraced auditor Dumisani Tshuma could amount to hundreds of thousands of rands, including legal costs.
Disgraced auditor Dumisani Tshuma today faces being slapped with a financial censure by a Independent Regulatory Board for Auditors (Irba) disciplinary panel.
Tshuma admitted to the improper conduct of benefitting by R9.6 million from VBS Mutual Bank in an abnormal lending practice.
The fine could amount to hundreds of thousands of rands, including legal costs. Appearing before the Irba panel, chaired by advocate Emmanuel Mokutu, Tshuma and KPMG audit partner Sipho Malaba, face a string of charges, including three for improper conduct. Mokutu said in the 2016-17 financial year, VBS was an audit client of KPMG.
“The respondent was at all material times, a partner in the same KPMG office as Mr Malaba. Betanologix was established by the respondent and Mr Malaba.
“During March 2016, the respondent and Mr Malaba on behalf of Betanologix applied for and were granted a facility by VBS…
“The respondent had signing and transacting authority over the Betanologix Classic Business overdraft bank account and the affairs of Betanologix, which he exercised in signing and transacting on behalf of the company.”
In the exercise of his signing and transacting authority, “the respondent knowingly made substantial payments to Mr Malaba and Ihawu Lesizwe Trading CC and knowingly made substantial payments to himself”. The Betanologix directors were the wives of the respondent and Mr Malaba.
“There were no repayments… “Appropriate and adequate security in respect of the facility was not provided. “The facility was increased regularly and resulted in an outstanding amount of R9 662 694 … before the VBS was put under curatorship.
“Despite the fact that the facility limit was exceeded and interest not serviced, none of the contractual rights that VBS had, pursuant to the purported facility agreement, were exercised by it against Betanologix,” said Mokutu.