The actual or perceived bias of two members of the Independent Regulatory Board for Auditors (Irba) disciplinary committee in the disciplinary hearing against three former auditors of Sharemax has made the case a nullity, argued advocate Mike Maritz.
A nullity in law is defined as something which may be treated as if it did not exist or never happened.
Maritz, who is appearing for Jacques Andre van der Merwe, Danie Dreyer and Petrus Johannes Jacobus Bekker, said this during an application this week for the recusal of Sorenzo Sooklal and Horton Griffiths, two members of the disciplinary committee hearing the case.
“All of it becomes a nullity, which is regrettable from our perspective because we say the pro forma [Irba] has no case and it is a huge imposition to our clients and of course it has been a massively costly exercise.
“But we cannot escape that conclusion of law,” he said after referring to several high court judgments that dealt with alleged bias or perceived bias in disciplinary or other hearings.
The three auditors at the time of the alleged offences were all directors of ACT Audit Solutions Incorporated.
They are collectively facing a total of 340 charges related to limited assurance engagement work they did for Sharemax. All three have pleaded not guilty.
The recusal application follows Griffiths confirming last week that he was a member of the Irba investigating committee between 1995 and 2007, initially as a member but subsequently as chair.
Maritz objected to this and some of the questions and statements made by Sooklal to Professor Harvey Wainer, an expert witness for the three auditors.
He also questioned the independence of the evidence of Brian Smith, the expert witness for Irba in the hearing.
It emerged during the hearing that Smith was part of Irba’s investigation committee from 2004 until 2016, and chair of the committee from 2011 until 2016.
Smith further admitted that he was chair of this committee when it concluded the investigations into the conduct of the three audit practitioners, reached an opinion on their conduct, and passed this on to Irba’s disciplinary advisory committee with a recommendation.
‘The well has been poisoned’
In an apparent reference to the alleged influence of Sooklal and Griffiths on other members of the disciplinary committee, Maritz said: “The legal position is quite clear that the well has been poisoned.”
Maritz added that with the conclusion they have arrived at “it could be an exercise in futility” to continue with the matter.
He accused Sooklal of misrepresenting Wainer’s evidence and of being disrespectful to Wainer by being dismissive, interrupting and arguing with him (verbally) and through his body language, and trying to ridicule Wainer’s evidence.
In regard to Griffiths, Maritz said he has too many hats and cannot sit on a disciplinary committee with his history and his Irba hat on.
Maritz added that when Griffiths made his disclosure about any involvement with Irba and its committees, Griffiths proudly turned the camera to some certificate on the wall and made a meal of pointing out that this was an Irba certificate of excellent service because of his involvement in the investigating committee work.
“What he said, what he achieved to demonstrate through that, was that he is an Irba man,” said Maritz
“Are we now as respondents to look at that and think, here we are going to have an objective unbiased independent adjudication of the issues in play in this matter. We think not, with respect.”
Maritz added that the powers that be at Irba do not understand that proceedings such as these are supposed to be seen to act completely independently and in an unbiased and impartial fashion, which is the cornerstone of a fair trial and a constitutional right.
“You do not load the committee with ex-investigating committee chairmen,” he said.
“You do not present evidence under the guise of an independent expert who happened to be the investigating committee’s chairman who had already investigated the matter and come to a conclusion. The entire proceedings are tainted by that,” he said.
Accuracy of allegations challenged
Maritz also attacked the accuracy of serious allegations made in Part A of the charge sheet, stating that during the course of the hearing it had been established that those allegations were false and constituted gross misrepresentations with the potential of severe prejudice to the three audit practitioners.
He referred to several of these, such as that the investors in Sharemax were typically pensioners and laypersons.
“We now know in the evidence that … there was never any foundation for that, yet that allegation was made for a particular reason, a false allegation and a misrepresentation was made.
“Why would an independent board acting through its officials and legal representatives or whoever else were responsible for the drafting of this Part A resort to this sort of conduct?
“That is the first elephant in the room,” he said. “What is that elephant doing?”
The hearing is continuing.