The Congress of South African Trade Unions (COSATU) welcomes former Venda Building Society Mutual Bank (VBS) auditor, Sipho Malaba’s permanent disbarment and R10 million fine by the Independent Regulator Board for Auditors (IRBA) for his disgraceful role in whitewashing its capture and rampant looting of millions of Rands. This is a long overdue action by IRBA against Mr. Malaba who had been employed by KPMG to audit VBS’ financial records. 

Mr. Malaba’s role not only helped cover up and whitewash one of South Africa’s most shameful instances of fraud, corruption and theft, it enabled this to continue for several years. This criminal heist of epic proportions saw thousands of VBS clients, mostly pensioners and workers lose millions of Rands in hard earned savings. It saw the collapse of VBS built up over many years through workers and pensioners’ savings and investments. It also saw innocent junior staff at VBS lose their jobs and their ability to take care of their families.

Whilst we are heartened that Mr. Malaba may never again practise as an auditor, a role he is clearly morally and ethically unfit for, it is not enough. Justice demands that the South African Police Service charge and the National Prosecuting Authority prosecute him for his role in the VBS heist. Such persons should not be allowed to get away with the theft of workers and pensioners’ hard-earned monies, especially the poor.

It is critical that National Treasury, IRBA and Parliament, expedite previous commitments to amend the Auditing Profession Act to require the mandatory rotation of auditing firms every five years to prevent incestuous and often very corrupt relationships developing between auditors and auditing firms with the very companies over whom they are employed to provide honest and credible audits. 

Perpetual auditing contracts over these companies compromises the integrity of their audits and provides a direct conflict of interest for these auditing firms. VBS, Steinhoff and countless other financial crime scenes are examples of the very real dangers to workers, pensioners and society of allowing these financially incestuous relations to develop.

COSATU will continue to engage with and push National Treasury, IRBA and Parliament to ensure that this long overdue tightening of the Auditing Profession Act is revived and fast tracked. This will be key to boosting President Cyril Ramaphosa and the African National Congress’ led government’s efforts to cleanse the state, private sector and society of the cancers of state capture, corruption and criminality.

Issued by COSATU

Matthew Parks (COSATU Parliamentary Coordinator)

Cell: 082 785 0687

Email: matthew@cosatu.org.za