Picture: BLOOMBERG NEWS/TANNEN MAURY
Picture: BLOOMBERG NEWS/TANNEN MAURY

The Independent Regulatory Board for Auditors (Irba) wants nothing less than to see former KPMG auditor Jacques Wessels permanently barred from doing any audit work.

“His conduct as an auditor ordinarily is not to be sceptical, it’s not to show independence,” said senior counsel Tim Breinders, for Irba, on Friday.

Wessels was responsible for the audits of Gupta family-owned Linkway Trading. The committee found him guilty in 2018 of all six charges Irba had levelled against him. Two of these were for dishonesty, while the other four related to negligence. On the negligence counts Wessels was found guilty of contravening four fundamental auditing principles and 31 auditing standards. 

Breinders said given the public interest on the matter the disciplinary committee should be careful not to give a ruling that the public will perceive as a slap on the wrist. 

“If you determine that public interest is not cancellation of his registration, it can’t be something a lot less than that. If your inclination is to give him a suspension, the public will be hard done by … because effectively a suspended sentence is a slap on the wrist,” Breinders told the committee.

Wessels’ impending sanction is considered one of the most important yet a disciplinary committee has given to an auditor charged by Irba. It will either entrench the public perception that auditors are not being held to account in SA or dispel the notion that the regulator is toothless about punishment.

However, Irba does not rule on what the sanction should be. Instead, an independent committee will make that decision and hand its ruling to the Irba board, which will decide whether to announce it publicly.

The committee can caution, reprimand, impose a fine, suspend his right to work as an auditor for a certain period, or rule that he be deregistered completely. But the Auditing Profession Act allows auditors who are struck off the roll to apply for reregistration as long as they are “fit and proper”. However, it does not provide for a minimum period they need to wait before reapplying. 

Azhar Bham, the senior counsel representing Wessels, has argued for a one-year suspension. Bham said it would be unfair to single Wessels out when so many other people have been caught up in the Gupta saga, including at banks and legal firms that worked for the family.

“Our law is careful in taking an immediate stance in dealing with dishonesty. There are some who are struck off and some who are mandated to pay a fine,” he said.

Wessels said on Thursday that he is in a difficult financial situation and has exhausted all his savings. He said he has a share in a game farm that he could sell for R450,000. Irba’s legal costs for handling his case have piled up to R2.3m, and the regulator said it wants him to immediately pay half. 

Bham argued that a fine would be “crippling”. 

The committee will announce its sanction in mid-March.

buthelezil@businesslive.co.za