SAA executive seeks legal advice after adverse Saica ruling

South African Airways executive Robert Newsome says he is seeking legal advice with a view to challenging the recent ruling against him by the disciplinary committee of the South African Institute of Chartered Accountants (Saica).

Newsome told Business Day on Friday there were many aspects of the matter that have not been reported. He said those unreported aspects "could compromise the predominant view on the matter".

He would not elaborate on unreported aspects.

The disciplinary committee has refused to disclose any details of the ruling.

However, ahead of the hearing at the end of May Saica had recommended that in addition to a five-year suspension and a R100,000 contribution to the institute’s legal costs, the disciplinary committee would publish its ruling.

Newsome, who was recently appointed interim head of risk and compliance at SAA, was accused of breaching the institute’s code. The sections he was accused of breaching relate to conflicts of interest, the requirement to act in the public interest and to act with integrity, objectivity and professionally.

Secrecy

The decision not to make the outcome of the hearing public is puzzling given Saica’s recent commitment to openness and the fact the hearing had been open to the public. In a departure from tradition, members of the media had been able to attend the Newsome hearing.

Asked for details of the ruling, Saica senior executive Willi Coates replied: "The disciplinary committee has delivered its ruling but has not ordered publication of the outcome."

The outcome has been provided to both parties, who, it appears, are not allowed to make it public. The parties are Newsome and Simon Mantell.

The matter dates to August 2017 when Mantell lodged a complaint against Newsome in his capacity as chairman of a disciplinary hearing conducted by the Institute of Internal Auditors of SA (IIA SA). The hearing followed an investigation by the IIA SA into the behaviour of Siyakhula Vilakazi, the chief audit executive of SAA. The investigation related to SAA’s handling of a tender awarded to Mantelli’s Biscuits in February 2014. The tender was subsequently withdrawn from Mantelli’s Biscuits without adequate explanation.

Mantell’s efforts to get an adequate explanation have resulted in critical investigations into SAA’s tender procedures, including one by the Treasury.

Despite damning evidence against Vilakazi, in April 2017 the IIA SA disciplinary hearing, chaired by Newsome, found there was insufficient evidence to charge him.

Mantell subsequently discovered that Newsome was a director of Orca, which had an eight-year contract to supply SAA subsidiary Mango with internal audit services. That contract expired at the end of October 2016 but Orca remains on an SAA supply panel.

Newsome joined Orca in June 2016 when he retired from PwC, which had been SAA’s main external auditor.

Mantell lodged the complaint with Saica on the grounds that Newsome had not disclosed a conflict of interest at the time he chaired the disciplinary inquiry.

On Friday the Saica board said it has approved the issuing of public statements regarding the progress and outcome of its disciplinary hearings.