Picture: GETTY IMAGES/ JACK TAYLOR
Picture: GETTY IMAGES/ JACK TAYLOR

Deloitte has quit as the auditor of a local fund manager Sygnia, forestalling its client’s plan to fire one of the biggest names in accounting.

In a statement issued on the JSE’s regulatory news service, Sygnia said it had already told Deloitte of its intention to drop it, and would have formally done so at a meeting on Thursday.

The news comes as some commentators question Deloitte competence after signing off an annual earnings report of Tongaat Hulett, whose listing on the JSE has been suspended as it scrutinises past bookkeeping practices for potential overstatement of asset values.

Deloitte also signed off on several results reports for Steinhoff, the global retailer in the middle of cleaning up its balance sheet after uncovering a multibillion-rand fraud.

Sygnia said it took the decision in May to start looking for a new auditor due to “our unsatisfactory engagement” with Deloitte and the “reputational risk associated with the firm”.

“Following further engagement with Deloitte and in the light of current news reports regarding the firm, the members of Sygnia’s audit committee resolved to formally terminate Deloitte’s appointment at its next audit committee meeting scheduled for 13 June 2019. Sygnia communicated its intentions to Deloitte on 5 June 2019.”

However, Deloitte subsequently quit on Tuesday, two days before the audit meeting, Sygnia said.

Deloitte said there were inaccuracies in Sygnia’s statement that was posted on the JSE SENS News service but those would be pointed out in due course.

“We believe that the SENS contains certain factual inaccuracies relating to the circumstances of our resignation,” Deloitte said.

“Whilst as Deloitte we maintain the highest standards of ethical behaviour and client confidentiality, we are of the view that it is prudent in this instance to set the record straight. We intend to do so in due course.”

motsoenengt@businesslive.co.za